Electric Automaker Tesla Raises Prices by Nearly 20 Percent in China
【Summary】In a response to President Trump's ongoing trade dispute between the U.S. and China, electric automaker Tesla has raised prices of its vehicles in the Chinese market around 20 percent.
SHANGHAI – In a response to President Trump's ongoing trade dispute between the U.S. and China, electric automaker Tesla has raised prices of its vehicles in the Chinese market around 20 percent.
Tesla's Chinese website showed a price increase of nearly 20 percent this weekend. The move comes after the U.S. and China retaliated against each other with tariffs on billions worth of goods.
On Friday, Washington's 25 percent duties went into effect at midnight EDT and affected various products including X-ray machine components, aircraft tires and industrial parts. China immediately retaliated with tariffs on a $34 billion list of goods issued last month, including soybeans, pork and electric vehicles.
The tariffs on soybeans might hurt the American farming industry the most. China bought 93.5 million tons of soybeans from the U.S in 2016 and 2017, according to data from the U.S. Department of Agriculture.
China has called it the "biggest trade war in economic history."
The California-based automaker had briefly slashed prices by around 6% after the Chinese government reduced its tariffs on imported cars to 15% from 25% on July 1. However, the discounts did not last long.
For example, Tesla's 75 kWh base-model Model X now costs 927,200 yuan, or $140,146. The price hike represents roughly a 20 percent increase from the $117,100 price last week.
Tesla is planning to build an assembly plant in Shanghai to serve the local market, but those plans are still being worked out. China is Tesla's second-biggest market ouside of the U.S. Last year, Tesla sold about 17,000 cars there.
Tesla isn't the only automaker that builds cars in the U.S. and ships them to China. BMW AG, Audi AG and General Motors (GM) all sell vehicles in significant volumes in China. GM's Buick and Cadillac brands are especially popular in the Chinese market. In 2017, GM's sales topped 4 million vehicles in China for the first time ever.
Despite the price increase, it's too early to tell if Tesla's sales will be affected, as the company is considered a luxury brand. Historically, sales of luxury vehicle brands are less affected by cost, as their affluent buyers are generally less concerned about the steep sticker prices.
Originally from New Jersey, Eric is an automotive and technology reporter specializing in the high-tech industry in Silicon Valley. Eric has over fifteen years of automotive experience and a B.A. in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the automotive industry and beyond. He has worked on self-driving cars and as a technical writer, helping people to understand and work with technology. Outside of work, Eric likes to travel to new places, play guitar, and explore the outdoors.
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