Tesla is cutting the purchase price of its Model X and Model S automobiles in China, ” the U.S. company said on Thursday, at a change in strategy which will see it require more of a hit against tariffs connected to some biting trade war between China and the USA.
The electrical carmaker, directed by billionaire CEO Elon Musk, said it will reduce costs of both versions by 12-26 percent to make the cars more”cheap” from the planet’s top automobile market, where sales of so-called new-energy vehicles are climbing quickly.
The move comes amid acute trade tensions between China and the USA, which has witnessed additional tariffs slapped on U.S. imports to the nation, such as cars, damaging Tesla which imports all of the automobiles it now sells in the industry.
“We’re absorbing an important area of the tariff to make our cars more affordable for clients in China,” Tesla said.
The move marks a change from July when Tesla was among the very first U.S. carmakers to increase prices on the marketplace in reaction to tariffs. The company hiked prices on its own Model S and X cars by about 20 percent.
Tesla cautioned last month it had been facing significant issues with selling automobiles in China because of new tariffs that could make it accelerate investment from its original overseas Gigafactory in Shanghai.
The carmaker past month secured the website for the centre, which will allow it to prevent exorbitant import tariffs.
The company, which recently introduced pre-sales of its Model 3 automobile in China, included in its announcement that the automobile’s price tag would begin from 540,000 yuan ($77,928.83) to get a double motor all-wheel drive variant, also 595,000 yuan for a performance variation.
Before the price increase in July, Tesla had reduced prices on its own units in China in May, after Beijing had said it might cut import tariffs for many automobile imports.