From Tesla's Price Strategy to Reflects the Overall Industry Trends of Electric Vehicles in China

Jiecheng Yan

doi:10.54097/gnkz1z93

Authors

Jiecheng Yan

DOI:

https://doi.org/10.54097/gnkz1z93

Keywords:

Tesla, China Electric vehicles, Pricing strategy

Abstract

This essay explains and focuses on the decreasing price strategy Tesla has adopted in 2022 and 2023. The cost of lithium batteries has decrease in 2023. The demand for electric vehicles is still high, due to the global trend of lowering carbon footprint and the tax reduction policy in China. To increase sales, Tesla decided to decrease the selling price of Model 3 and Model Y, both designed for middle-level income customers. By analyzing the financial ratios, it is proved that the pricing strategy was successful, and Tesla could tolerate the failure if this strategy couldn’t work out in the long run. The electric vehicle market in China is becoming saturated. There will be a price war in the future, and many brands might disappear because of this. Tesla should retain its brand independence and spend more on research and development to further increase its market share. From Tesla's Price Strategy to Reflects the Overall Industry Trends of Electric Vehicles in China.

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