Electric cars: Tesla shares sink – Li Auto after price cuts counter – Economic Post

Shares of major electric car makers tumbled on Monday amid an intensifying “price war” to make the vehicles they market more affordable for consumers hit by inflationary pressures.

Tesla’s stock lost more than 3% today and was down more than 4% in the morning. China’s Li Auto stock fell to an 11-month low, losing more than 8% of its value. These results came after it was reported that both companies have cut the prices of their electric vehicles in various markets amid intense competition.

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The US electric car giant cut the starting price of the Model 3 in China to 231,900 yuan ($32,000) on Sunday, a reduction of 14,000 yuan, Reuters reported, citing price cuts at other major automakers. markets such as Germany.

For its part, Li Auto has cut prices for its models, including the L7, L8, L9 and the recently launched Mega SUV, it announced on its Weibo account on Monday. Price cuts for its models have reportedly reached up to 30,000 yuan.

According to CNBC, checks by reporters of both Tesla and Li Auto’s websites on Monday showed their vehicles were listed at the updated prices.

11-month low for Li Auto

Shares in Hong Kong-listed Li Auto fell 8.3 percent to an 11-month low during Monday’s session, while other Chinese EV makers also fell — Nio fell 1.7 percent, Xpeng closed up 1.9% and BYD fell 0.2%.

The latest price cuts come at a time when competition in China’s electric vehicle space has intensified, with local automakers battling to overtake US rival Tesla by pushing impressive technology and offering competitive prices.

Eugene Hsiao, head of China equity strategy at Macquarie Group, pointed out in a research note over the weekend that all of China’s biggest EV makers have one goal in mind – “to take the crown from Tesla,” noting that it has become the most competitive domestic car market in recent history.

Hsiao said the price cuts were just one aspect of a variety of strategies being used by China’s big electric mobility players to survive “in the coming wave of industry consolidation.”

Chinese smartphone maker Xiaomi launched its SU7 electric car earlier this month and priced it around $4,000 less than Tesla’s Model 3. The company also claimed that the new car will have a longer driving range.