Tesla has cut prices again.

    Earlier on the evening of October 1, Tao Lin, the head of Tesla China, responded to the “National Day official announcement of price cuts” on Weibo for the first time, saying that Tesla’s vision is to accelerate the world’s transition to sustainable energy. Many people can enjoy high-performance fully intelligent zero-emission electric vehicles.

    This is because on October 1, the price of the domestic Model 3 standard battery life upgraded version on Tesla's official website in China dropped from 271,55 thousand yuan to 249,900 yuan. The subsidized price of the long-endurance rear-wheel drive version dropped from 344,050 yuan to 309,000 yuan, and the price of the Performance high-performance version remained unchanged.

    This is the sixth time the price of this model has been adjusted in the domestic market, with a price reduction of over 100,000 yuan.

Domestic help to explore the low-price market

    The last time Tesla adjusted the price of the domestically produced Model 3 was on May 1 this year.

    At that time, the domestic version of the Model 3 standard battery life upgraded version before the subsidy price was reduced from the original 323,800 yuan to 291,800 yuan. After enjoying the 20,250 new energy vehicle subsidy, the final purchase price of the domestic version of the Model 3 standard battery life upgraded version was reduced 271,55 thousand.

    At present, the domestically-produced Model 3 is sold at the lowest price since its domestic launch.

    Judging from the price adjustment in May, the data released by the Federation of Passengers shows that in April, the sales of the domestic Tesla Model 3 were 3,635. In May, the sales of the domestic Tesla Model 3 were 11095, an increase of 205% from the previous month; in June, the sales of the domestic Tesla Model 3 were 14,954, an increase of 35% from the previous month.

    Subsequently, sales in July, August, and September were 11,100, 11,800, and 11,300, respectively, maintaining an average monthly sales data of more than 10,000.

    Model 3 price cuts are one of the reasons for Tesla's increase in sales figures since May. Tesla used price cuts to get its products to receive new energy subsidies.

    Squeeze the market for fuel vehicles at the same price and stir up the new energy market

    After the price adjustment in May, Tesla sold 14,900 vehicles in June.

    However, the China Passenger Association stated that China's pure electric vehicle sales in June were 67,000, a 40% year-on-year decrease, but Tesla's market share increased by 23%, mainly due to the increase in sales of domestically produced Model3.

    In the same month, BYD Qin EV sold 4 thousand, Ai'an sold 3 thousand, Weilai ES6 sold 2400.

    Tesla's domestic production has undoubtedly stirred up the domestic new energy vehicle market.

    The continued downward adjustment of domestic Tesla prices has expanded the market space and scope of competition, which will not only impact domestic new energy vehicle brands, but also squeeze the fuel vehicle market in the same range.

    The price of the domestic Model 3 before the price adjustment already has an advantage in the domestic B-class luxury car market. In the domestic B-class luxury car market, the Audi A4L, Mercedes-Benz C-Class and BMW 3 Series, and now the domestically produced Model 3, whose price has dropped to 249,900 yuan (subsidized price), has a more obvious price competitive advantage and can also seize the B Class civilian car market.

    Looking at the domestic new energy market, Tesla has continued to lower its prices after making it domestically, grabbing the market share of some independent brands, and accelerating the reshuffle of the new energy vehicle industry.

    On the other hand, the localization of Tesla has promoted the technological upgrading and brand development of its own brands in new energy vehicles, and has also improved China's new energy vehicle industry chain.

    The domestically produced Model　3 long-life version has a high overlap in the price range of new car-making products, which is higher than Xiaopeng P7 (230 thousand yuan), GAC Weilai HYCAN　007 (262,000 yuan) and other models, and lower than Weilai ES8 (46.7) Ten thousand yuan), and the price of Weilai ES6 (358,000 yuan) is not much different.

Tesla will drop

    The price reduction of the domestically produced Model 3 by Tesla this time is closely related to the technical upgrade of the model and the continuous increase in the localization rate.

    Insiders believe that there is still room for price cuts for the domestic version of Model 3. Previously, Tesla announced that the localization rate of domestically produced Model 3 parts will increase from 30% at the beginning to 70% by the middle of the year and 100% by the end of the year.

    Since the production cost of the domestic Model 3 is 20% to 28% lower than that of the US version, the gross profit margin of the domestic Model 3 is significantly higher than that of the Model 3 produced in the United States.

    At the beginning of this year, a well-known domestic securities firm released a research report showing that if Tesla adopts a domestic supply chain and is 100% localized, then Tesla's minimum price may be 197,000 yuan.

    It is undeniable that the cost reduction is the backing of the frequent price cuts of the domestic Tesla Model 3, and the price drop has also helped Tesla to increase sales to a certain extent.

    Cost reduction is one aspect, and the sustained and steady growth of sales volume is closely related to the decline in terminal prices. Although many car owners are dissatisfied with Tesla's price cuts, domestic consumers still find it difficult to resist the temptation of Tesla's low prices.

    Summary: From a market perspective, Tesla is a pioneer in the field of new energy, and also a benchmark in this industry, and is regarded as an anchor point for product output by new car manufacturers. Then, relying on cost control to reduce prices and owning their own cost-effective products in low-price areas will be different from the new forces in car-making.

    From Tesla's point of view, long-term development in the Chinese market requires a large inherent user group, and the way to grab the user group by cutting prices is the fastest.