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by Qiaoyi Li and Brenda Goh
BEIJING (Reuters) – US automaker Tesla sold 84,159 China-made electric vehicles (EVs) in August, up 9.3% from a year earlier, data from the China Passenger Car Association (CPCA) showed on Monday. .
Sales of China-made Model 3 and Model Y cars rose 30.9% from a month earlier.
Chinese rival BYD, with its Dynasty and Ocean series of EVs and petrol-electric hybrid models, recorded deliveries of 274,086 passenger vehicles in August, up 57.5% year-on-year.
Tesla has launched a price war in the world’s biggest auto market as early as 2023 to protect its market share, which has come under pressure from main local rival BYD and smaller players.
Its moves include cutting prices in China twice in three days in August and announcing additional cuts on Friday, adding cash discounts in July and fueling a price war that has drawn more than 40 brands to China .
Prioritizing sales has taken a toll on Tesla’s profit margins. Reuters calculations showed its gross margin from automotive sales fell to 17.9% in the first half, from 27.8% in the year-ago period.
In contrast, BYD’s latest financial disclosure showed that its automotive gross margin expanded to 20.67% in the six months ended June, an increase of 4.36 percentage points from a year earlier. Citi analysts said this was helped by the automaker’s “massive production advantage”.
However, on Friday Tesla first released a refreshed version of its Model 3 vehicle in China, with a starting price 12% higher than the previous base rear-wheel drive model.
Other manufacturers, including smaller rival Xpeng and newcomer Xiaomi, are looking to announce even more affordable models, intensifying the competition.
Xpeng will launch an A-Class model in the sub-150,000 yuan ($20,571.62) segment under a project called MONA as part of a late-August deal to acquire ride-hailing giant Didi’s smart EV unit. Xpeng’s current models are mostly priced above 200,000 yuan.
Xiaomi, which started life as a budget phone maker, has also secured approval from China’s state planner to make an EV.
Despite several measures to reduce big spending, the challenges have been compounded by a slump in car sales as China’s post-pandemic economic recovery falters, with major banks slashing China’s 2023 growth target to around 5%. Took the risk of missing out.
($1 = 7.2916 Chinese Yuan Renminbi)
(Reporting by Qiaoyi Li, Zhang Yan and Brenda Goh; Editing by Christopher Cushing and Louise Heavens)
Source: finance.yahoo.com
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