Tesla vs Chinese EV Brands: The price war of electric cars is in full swing

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BYD Electric Cars

Western automotive industry has long realized that it is starting to lose competition to the Chinese. There is still a long way to complete defeat, but without large-scale investments, public policy settings or a technological breakthrough, the gap will be more noticeable every year.

Already, the spare capacity of the Chinese automotive industry is estimated at about 10 million cars per year. This is comparable to the production of passenger cars in 27 EU countries for the whole of last year. 

If all the car factories in Europe suddenly close immediately, China will not even need to increase production — it will readily flood the market with its cars, as happened in Russia.

Therefore, the market leader Tesla has been cutting prices for the umpteenth time. Therefore, the US authorities have allocated $ 270 billion to support the “green restructuring” of the economy, including subsidies for the purchase of American electric cars. 

After another price cut, the Tesla Model 3 and Tesla Model Y, the best-selling electric cars in the world, cost less than the average new car in the United States. Now the price of Tesla cars has become cheaper than the cars we are used to.
A strange situation is being created, on the one hand – owners of Tesla cars bought more premium cars, but on the other hand – now the Tesla brand has become in the price segment of budget cars. what will happen next?

After consistently and gradually increasing the prices of electric vehicles over the past two years, Tesla began to reduce these prices in 2023 in order to maintain demand at a high level. It all started with a big drop in prices in early January, and then small adjustments followed.

As a result, new Tesla electric cars for the first time began to cost less than $ 40,000 even before the tax breaks were applied. Tesla Model 3 Standard Range RWD, the most affordable Tesla car, fell from $41,990 to $39,990. This is the only Tesla model for which the federal tax discount has been reduced from $7,500 to $3,750.

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*Cold weather: 14 °F and use of heating. Mild weather: 73 °F and no use of A/C. ‘Highway’ figures a constant speed of 70 mph is assumed. ‘City’ figures a constant speed of 30 mph is assumed.