(Yicai Global) May 23 -- Tesla Inc. and BMW Group are among foreign automakers that look set to slash prices in China after the country announced plans to cut import tariffs on vehicles to 15 percent from as much as 25 percent.
Palo Alto-based Tesla may lower the price of its all-electric cars in China by between CNY40,000 and CNY90,000, according to a price adjustment document that appeared online. In particular, the Model X P100D sports utility vehicle could be more than CNY90,000, or 10 percent, cheaper. A Tesla spokesperson told Yicai Global that there has been no official announcement but said a fall of around CNY50,000 is credible.
The China units of BMW, Audi AG, and Volvo Group have also welcomed the tariff cut and have initiated price evaluations, they told Yicai Global.
China’s government issued a notice on lowering import taxes on vehicles and auto parts yesterday. Effective from July 1, the average duty levied will be 13.8 percent, while the mean rate for parts and components will fall to 6 percent.
Producers and distributors of high-priced cars stand to benefit the most from the tax cuts, but consumers will also pay less, said Shu Chang, an auto expert from consultancy firm Roland Berger. The biggest impact will be seen in the NEV sector, he added. Electric models such as the Tesla Model 3 may bring pressure to bear on the prices of green cars made by domestic startups such as NIO Co.
Car imports jumped 17 percent last year to 1.2 million, data from the China Automobile Dealers Association shows. Only about 2 percent (22,300) of these were new energy vehicles, though this figure was more than a third higher than the year before. SUVs dominated the market, accounting for 88 percent of cars bought directly from overseas.
Editors: Emmi Laine, William Clegg