Analysts believe Tesla’s decision will increase its sales, which fell in December and compel other EV producers to lower costs as well, at a time when demand in the world’s biggest market for battery-powered vehicles is weakening.
“Price reductions are part of this EV cycle in a weaker (economy) with more competition in China,” Daniel Ives, an analyst at Wedbush Morgan who follows Tesla, wrote in a tweet on Friday.
While conventional automakers sometimes discount to manage inventory and keep factories operating when demand falls, Tesla works without dealerships and has made transparency part of its brand image.
“It may be a normal business practice but this is not how a responsible enterprise should behave,” said one Tesla owner, who provided his surname as Zhang, protesting outside the company’s delivery centre in Shanghai’s Minhang area on Saturday.
He and the other Tesla owners, who claimed to have received their vehicles in the latter months of 2022, expressed their frustration with Tesla’s lack of an explanation for Friday’s price reduction and its abruptness.
