Tesla Inc (NASDAQ:TSLA) recently reduced the price of the Model 3 in China. This has been a continuing trend after Tesla was able to build a factory in China for locally produced cars, with the latest price cut coming from the switch to less expensive LFP batteries sourced from CATL.
A summary by Teslarati details the difficult time other Chinese EV makers are now having thanks to Tesla's price cuts.
The price cuts made the Model 3 SR+ more affordable than XPeng Inc's (NYSE:XPEV) offering, often considered a Tesla copy cat. Xpeng announced it would not be reducing prices on the company's vehicles. This is not to mention the $25,000 Tesla to come in the next three years.
Benzinga's Take: Price cuts are often considered a sign of weak demand, but Tesla has stated it cuts prices in accordance with savings. This keeps the company's margins the same and passes the savings to customers. Tesla's ultimate goal is to transition the world to sustainable energy.
Photo courtesy of Tesla