Tesla Inc.’s weekend move to slash prices across its range in China risks triggering a new round in the nation’s bruising price war, with Li Auto Inc. immediately responding with discounts and cash rebates on new models.
Chinese EV stocks dropped in morning trading Monday. Li Auto fell 6.4%; NIO and XPeng fell 4%.
Li Auto on Monday announced price cuts of about 6-7% across its lineup, with the L7 five-seat sport utility vehicle now starting from 301,800 yuan ($41,700).
People who have already ordered but not taken delivery of their cars will be entitled to the new price, and Li Auto will offer cash rebates to existing owners of the 2024 models. The automaker’s shares slumped as much as 6.9% in Hong Kong trading.
Tesla lowered prices across the US, China and Europe after disappointing first-quarter sales contributed to swelling inventory. In China, the revamped Model 3 fell to 231,900 yuan from 245,900 previously — back to its special launch price. The Model Y was discounted to 249,900 yuan — the cheapest it’s been in at least five years.