Up to 20% off… Chinese companies join
Hyundai Motor Company “no response plan” wait and see
Pay attention to whether it will signal a ‘price war’
On the 13th, Tesla cut the Model 3 Performance by 14% from $62,990 to $53,990. The Model Y Long Range is down 20% to $52,990. Model S and X are also 10 to 15 percent cheaper, respectively.
The automobile industry is paying attention to the possibility that this price cut is a sign of a ‘chicken game’ from Tesla.
Standard, the cheapest grade of the Ioniq 5, costs $41,450 in the US. The Model 3 Standard, an entry-level Tesla vehicle, was priced at $43,990 this time, which was reduced by $3,000, which is more than $2,000 more expensive than the Ioniq 5. However, Hyundai Motor Company, which does not yet have an electric vehicle plant in the United States, cannot receive tax credits under the Inflation Reduction Act (IRA), which came into effect in August of last year. On the other hand, if the tax credit of $7,500 is applied to the Model 3 Standard, the final price is $36,490, which is $4,960 cheaper than the Ioniq 5.
There was also an analysis that Tesla lowered the price to below $55,000, which is subject to tax credits, aiming for IRA benefits. The price range of Tesla’s flagship models has come down from $50,000 to $60,000 to $40,000 to $50,000 (up to $30,000 when applying an IRA). It is a price range where latecomers to electric vehicles such as the Ioniq 5, Kia EV6, Volkswagen ID.4, and Ford Mach-E are lined up.
In China, the Model 3 is 229,900 yuan (about 42 million won), about 13% cheaper, and the Model Y is 259,900 yuan (about 48 million won), about 10% cheaper. Thanks to this, Tesla’s sales in China increased by 76% compared to the previous year. Cyris, a Chinese electric car company, immediately started pursuing discounts by lowering the lowest price of ‘Aito’ to a level similar to that of Model Y.
According to the industry on the 24th, traditional automakers, including Hyundai, are still in a wait-and-see mood. A Hyundai Motor official said, “There is no plan to respond,” and “Tesla alone has gone up and down in price, so there will be no need to react.” Opposition from existing borrowers who bought it at a high price is also a consideration.
However, it seems difficult for the Korean market, which is always called the ‘test bed’ of the global electric car market, to remain a windless area for Tesla’s ‘electric car war’.
This year, domestic cars such as Hyundai Kona EV and Ioniq 7 and Kia EV9, as well as electric vehicles from prominent companies such as Audi A6 Etron, BMW i7, and Volvo Polestar 3 are scheduled to be released. In addition, BYD, which dominated the Chinese domestic market, is about to enter the Korean market in the second half of this year.