Tesla slashes prices of its cars by a quarter in China to boost sales

Beijing: Top manufacturer of electric cars Tesla is slashing prices of its models in China by up to a quarter in an effort to boost sales in the world's largest new energy vehicle market.

The US carmaker said on Thursday that it is cutting the prices of its Model S sedan and the Model X SUV in China by 12 per cent to 26 per cent.

The cheaper Model 3's prices in China, which were also released on Thursday, are now 14 per cent lower than the previous pre-order prices.

"We are absorbing a significant part of the tariff to help make our cars more affordable for customers in China," state-run China Daily quoted a Tesla statement as saying.

China, where new energy vehicle sales surged 75.6 per cent in the first 10 months of this year to 860,000 units, is one of Tesla's most important markets.

Tesla's sales in China totalled 2,147 units from August to October, a 56 per cent fall year-on-year, according to statistics from the China Passenger Car Association.

Last year, it sold 17,030 cars, accounting for 16.5 per cent of its global sales.

The carmaker had raised the prices of its models in July by around 20 per cent after China imposed an extra 25 per cent tariffs on cars from the United States in response to US tariffs on Chinese goods.

The new move by the carmaker is seen as an attempt to ward off any negative effect from the ongoing US-China trade war, the report said.

Tesla is the first foreign carmaker to be granted approval to establish a wholly owned plant in China as the nation opens its automotive industry wider to the world, the China Daily reported.

Last month, Tesla secured the site for the facility, which is expected to produce around 250,000 vehicles and battery packs annually, with this figure growing later to 500,000 units.

The first cars are expected to roll off the production line in around three years, the report said.