Tesla vs Chinese EV makers in epic battle in world's largest car market

Tesla has long had a commanding say in the Chinese electric vehicle (EV) market which also happens to be the largest in the world. A dominant lead in China almost always translates into a superhero-like bragging rights across the world but local EV players in the country are putting up a David-like fight against a number of global Goliaths.

Tesla was recently forced to cut prices of its locally-made Model 3 in the Chinese market by five per cent to 265,900 yuan which is around $36,774 or ₹30.43 lakh. It had a significant impact on Tesla shares half way across the globe, in New York trading where the stock tumbled by around 7.4 per cent. But ramifications on Wall Street aside, many believe Tesla has to play the price game with grit or it would end up ceding space to local players in the Chinese market.

In recent times, local automotive giants like BYD, Nio and Xpeng have been shifting to upper gears. BYD, for instance, sold a record 200,973 vehicles just last month as against Tesla delivering a personal best of 83,135. China's Passenger Car Association highlights that local manufacturers have contributed to as much as 80 per cent of all car sales in the country in the first seven months of this year. This despite almost every major global automotive brand having a presence here and looking to play big.

While Tesla's first factory outside of the US was opened in Shanghai a few years ago - a clear sign of how important China is, a few others have resorted to introducing China-specific or China-first versions of their popular car models. A major influence on how global profits' outlook - Tesla earns a quarter of its profits from China alone, the importance attached to the market here is obvious and often quite understandable too. Just that the local players are just as enthusiastic.

(With inputs from Bloomberg)