Tesla’s Sudden Price Reductions Spur Chinese Car Owners to Defend Rights

Tesla announced price adjustments for mainland China on October 24, affecting its Model 3, which dropped by as much as 18,000 yuan ($2,497), and its Model Y, which dropped by as much as 37,000 yuan ($5,132). Subsequently, many Tesla car owners who had recently made orders set up “rights protection groups” on WeChat, with the aim of organizing actions such as visiting Tesla stores to ask for compensation, but some car owners were taken in by fraudsters.

SEE ALSO: Tesla’s Model 3 and Model Y Undergo Price Drops of Up to $5,102 in China

According to chat records posted by web users, one group chat owner launched a crowdfunding activity calling on each member to fund 5 yuan ($0.69) to place rights protection banners on Tesla stores. After many transferred money, however, the group owner absconded with a total of about 1,000 yuan. One car owner in the group wrote, “We are really unfortunate. Not long after losing 28,000 yuan, another 5 yuan is taken away, too.” Some car owners suggested reporting the incident to the police, but it will be very difficult to retrieve the lost funds.

Some people have even started businesses targeting these Tesla car owners. According to chat records posted by web users, some are offering rights-defending services for Tesla car owners in Dongguan, Guangdong Province, including the creation of rights protection banners (500 yuan/hour), shouting (200/yuan), photographing (200/yuan), and even rolling on the ground (600 yuan/hour).

Tesla’s price reductions have caused extensive discussion among the industry and consumers. On October 24, a Tesla China customer service staff member told Chinese media that if the customer placed an order and has not yet received the car, they can enjoy the latest reduced price. If the customer has already received the car, compensation measures are currently not available.

Part of Tesla owners felt “heartbroken.” One wrote, “So speechless. The car I just bought dropped its price by 8,000 yuan within a week and 14,000 yuan within a month.” Another expressed, “Since I bought my car up on September 12, the price has dropped twice in a month and a half, with a difference of 36,000 yuan. I feel like I’m being fooled again and again. Now I have no loyalty to Tesla, and my feeling towards this brand has also dropped to zero.”

It is worth noting that this is not the first price reduction made by Tesla in China. “With the rise of Chinese carmakers, market competition has increased. Tesla’s sales in China have lagged behind BYD, therefore it needs to increase sales promotion to maintain the market share. Price reduction is the most direct strategy,” said Zhang Xiaorong, Dean of Deepin Technology Research Institute, in an interview with Time Weekly. Zhang added that Tesla’s profit margin has always been higher than that of its peers, and there is room for price reductions.

This year, after upgrades to the Tesla Shanghai Gigafactory were completed, production efficiency has improved and costs have been reduced, so there is the possibility of further price reductions. Besides, China’s subsidy policy for the purchase of new energy vehicles will be terminated on December 31, 2022. After that, vehicles will no longer enjoy subsidies when getting licensed. Price reductions will also enable Tesla to stimulate its Q4 sales.