BYD, Tesla locked in EV price battle in China as growth slows

BYD and Tesla, two of the world's largest electric vehicle manufacturers, are all set to lock themselves in a price war on electric cars in the largest car market China. Tesla has announced several incentives for its EV customers in China to boost sales, days after BYD also announced similar move to take on its arch rival. Tesla had earlier announced price war in the EV segment last year, which helped it increase volume but fell short of expectations.

On Friday, Tesla said that a rear-wheel drive Model 3 or Model Y can be had with insurance subsidy worth more than a thousand dollars (roughly converted to around ₹83,000). Though it is not a regular price cut offer, the subsidies will help to bring down the price of the two electric cars substantially. The scheme is available on both models which are readily available for delivery within March. Tesla has also announced preferential financing plans and discounts on some optional paint colours.

The move comes a month after Tesla had reduced the starting price of Model 3 and Model Y in January. The move had prompted its rivals to go for similar scheme with its arch rival BYD slashing prices of some of its models by up to 20 per cent. Earlier this week, BYD also unveiled its plans to offer more affrodable electric cars in China to increase sales. The EV maker is giving bigger discounts on most of its models than last year.

BYD has announced two entry-level versions of the Han and Tang models with prices lower by up to 14 per cent of the standard versions of these EVs. The world's largest EV maker had also introduced a new version of its Dolphin hatchback and plug-in hybrid Qin Plus DM-i sedan with entry-level versions with prices lowered by up to 20 per cent.

The EV price war in China has intensified amid the sales of electric vehicles and plug-in hybrid vehicles declining by more than 30 per cent in January. This is the first time that the segment has seen a slump since August last year, despite price cut initiatives led by Tesla.

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