In January 2023, the sales of Wei, Xiao, and Li Auto decreased by 11.9%, 59.6%, and 23.4% year-on-year respectively.

When Tesla cuts its prices, does it also affect the sales of its competitors?

With the release of January deliveries, the latest conclusion shocked foreign media: Tesla’s price cuts caused NIO, Xpeng and Li Auto’s sales to plummet by 60%.

Some analysts also believe that despite other factors, Tesla's price cuts are the main reason for the decline in sales of other companies.

There are also reports that Tesla is preparing to increase production at its Shanghai factory to 20,000 units per week due to increased demand.

So, is Tesla’s price cut really taking away market share from domestic new energy vehicles?

So far, some new domestic forces have announced their sales data for January. Among them, the sales of Wei, Xiaopeng, and Li Auto in January this year decreased by 11.9%, 59.6%, and 23.4% year-on-year respectively.

Coupled with the news of Tesla’s recent promotional price cuts, some foreign media believe that Tesla’s price cuts in China have led to a decline in sales of NIO, Xpeng and Li Auto.

Although we all know that the Chinese New Year holiday in January will also affect car sales, Shanghai independent analyst Gao Shen still believes that Tesla's price cuts are the main reason for the decline in sales of several automakers.

“Obviously, Tesla’s huge discounts have reduced consumers’ interest in buying domestic smart electric vehicles… Overall demand for expensive electric vehicles seems to be starting to weaken, which could lead to a price war in the high-end electric vehicle segment this year.”

So, is this really the case?

How are the sales of Tesla, NIO, Xiaoli and Li Auto?

First, let’s take a look at Tesla’s sales in January this year since it announced a price cut.

Although there are only 29 days of data available, Tesla did not sell as many vehicles in January as it did in December last year, at 25,562.

But year-on-year, Tesla's sales in January this year did exceed those in January last year. Even in February 2022, which was also the Spring Festival holiday month, Tesla's sales did not decline.

It seems that Tesla’s price reduction promotion does have some effect?

Then let’s take a look at the sales data of Weili, Xiaoli and Li Auto.

Among them, NIO and Xpeng sold 8,506 and 5,218 vehicles respectively in January this year, down 11.9% and 59.6% year-on-year, and down 46.2% and 53.8% month-on-month respectively.

The sales volume of the three companies, NIO, Xiaopeng and Li Auto, fell by about 60% year-on-year.

However, Ideal's sales in January this year were 15,141 vehicles, up 23.4% year-on-year and down 28.7% month-on-month, which was not a "down 23.4%" as written by foreign media.

In addition, compared with February, which was also the Spring Festival, sales of NIO and Li Auto increased by 38.7% and 80.0% respectively, while sales of Xpeng Motors fell by 15.3%.

The overall sales of NIO, Xiaoli and Li Auto showed an upward trend during the Spring Festival month.

In addition, the withdrawal of national subsidies for new energy vehicles from January this year will also affect the sales of new energy vehicles.

To sum up, factors such as the Spring Festival holiday and the withdrawal of national subsidies will have an impact on sales, but at least it is clear that Tesla’s price reduction is not the core reason affecting the sales of these companies.

At least Tesla’s price cuts will not cause NIO, Xiaopeng and Li Auto to fall by 60%.

Tesla's "catfish effect"

However, Tesla's price cuts and promotions did trigger a price war.

This year, Xiaopeng, Wenjie, Geely Emgrand, Wuling Hongguang and Ford Electric have all started to launch price cuts to boost sales. Xiaopeng and Wenjie also provide different levels of feedback to old car owners, such as vehicle maintenance and extended warranty.

This is naturally a good thing for consumers.

Tesla's price cuts may stimulate overseas sales more. Musk revealed at the earnings conference that the order volume in January was about twice the production volume.

There have also been reports recently that Tesla will increase production at its Shanghai factory, with the goal of producing 20,000 vehicles a week.

According to the latest news, NIO has also started price cuts and promotions, with the 2022 ES6 and ES8 seeing the maximum price reduction of more than 100,000 yuan.

The "catfish effect" brought by Tesla may lead more car companies to join the ranks of price cuts and promotions in the future.

But Tesla's products are not invincible, at least not in China. Musk also admitted that Chinese automakers are most likely to be second only to Tesla.

Tesla vs. Chinese automakers: Who wins? Sales will tell

Self-Qubit