Due to Weak Demand for Electric Vehicles... Tesla Extends Discount Sales in China

[Asia Economy Reporter Kwon Haeyoung] Bloomberg reported on the 1st (local time) that Tesla is extending its electric vehicle sales discount policy in China. As demand for electric vehicles slows and the fandom for CEO Elon Musk cools down, Tesla is abandoning its fixed price policy and offering discounts one after another in the US, China, and other markets.

Through its website, Tesla announced that it will provide incentives of up to 10,000 yuan (about 1.8 million KRW) for deliveries of the sedan Model 3 and the sport utility vehicle (SUV) Model Y through the end of next month. Since early November last year, Tesla has been offering a 4,000 yuan (about 730,000 KRW) subsidy related to purchase insurance in China, and from early December, an additional 6,000 yuan (about 1.09 million KRW) was provided. All of these supports have been extended into the new year.

Tesla is also implementing discount policies in the US. After offering a $7,500 discount on the Model 3 and Model Y, the discounts were expanded to the higher-end Model S and Model X vehicles.

The reason Tesla, which had maintained a fixed price policy until now, has started discount sales is due to the accumulation of inventory caused by the slowdown in electric vehicle demand. Although Tesla is expected to announce its largest quarterly earnings in early January, the goal of 50% growth this year is already considered out of reach. Due to concerns over poor performance, Tesla's stock price plunged 37% last month alone.

[Image source=Yonhap News]

Musk's erratic behavior and owner risks are also negative factors. Since acquiring Twitter in October last year, he has faced criticism for financial pressure and neglecting Tesla's core business. The fandom of consumers who supported Musk is rapidly cooling due to a series of erratic actions, including large-scale layoffs of Twitter employees and mass suspensions of journalist accounts that wrote critical articles about Musk.

Due to the stock price decline, Musk has become "the first person in history to lose $200 billion in wealth." Bloomberg reported, "Musk became the second person after Amazon founder Jeff Bezos to accumulate over $200 billion in personal assets in January 2021," adding, "He has now set his own record as the only person in history to lose $200 billion in net worth."

This content was produced with the assistance of AI translation services.