Tesla suddenly posted record-low vehicle prices for the Chinese market on January 6, dropping the value of its Model 3 by between 20,000 and 36,000 yuan ($2,942 – $5,297) and of its Model Y by between 29,000 and 48,000 yuan ($4,267 – $7,063), causing many Chinese car owners to organize in an attempt to defend their consumer rights.
On January 7, according to videos on Weibo, a Tesla store in Chengdu witnessed the most intense rights protection action since the US electric vehicle brand entered China. The images show Tesla car owners emptying the store of all merchandise gifts, snacks and drinks, and even destroying a toy electric car.
In addition, in a joint letter mixed with signatures and fingerprints, some car owners proposed that Tesla should compensate them for 100,000 km of super charging service, 1 million points, lifetime full self-driving and two to four years’ warranty, which would be worth more than 100,000 yuan.
The store staff responded, “We have told all car owners that there is no confidentiality agreement and no compensation plan. On January 6 evening, they went back one after another, and some of them left very late.”
On January 7, more than 100 Tesla car owners gathered at a delivery center in Changsha, Hubei Province, to defend their rights. Some car owners reported that they had repeatedly been urged to pick up their cars when told that this is the lowest price and subsidies will be cancelled soon. Some consumers thought that they were induced to buy cars by fraud, and dissatisfaction spread among them.
Car owners in Wuxi, Jiangsu Province, reportedly successfully obtained a compensation plan from Tesla. According to the plan, Tesla will compensate car owners for the life-long free premium car entertainment service package, full self-driving, basic auxiliary driving function and two-year warranty service. However, reports of this scheme were refuted by Tesla. There will be no compensation scheme for the price reduction at present, added a Tesla spokesperson.
Grace Tao, global vice president of Tesla, previously said, “Behind the price adjustment of Tesla, it covers countless engineering innovations, which is essentially a unique law of cost control, including not limited to vehicle integration design, production line design, supply chain management, and even optimizing the collaborative route of mechanical arm in milliseconds… We insist on pricing at cost.”
“We expect that Tesla still has the possibility of continuing to cut prices, and the next price reduction is expected to occur in the middle and late second quarter of this year,” Huxiu quoted an industry insider as saying, adding, “At present, the number of stores of various brands is insufficient compared with last month, and everyone’s enthusiasm for buying cars is slumping.”
With the development of independent Chinese independent brands, consumers in the country found themselves with more choices in 2022. Even if Tesla Model 3’s starting price dropped to 229,900 yuan, consumers can buy models like Changan Auto’s SL03, Leapmotor C01 and BYD Han at the same or even lower price, which far exceed Model 3 in terms of comfort, space size, configuration and cost performance. Moreover, since the release of Model 3 in 2017, there has been no obvious change or replacement.