© Reuters. People check a Tesla Model Y electric vehicle (EV) displayed at its booth during the 2021 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2021. REUTERS/Florence Lo
SHANGHAI (Reuters) – Prospective Tesla (NASDAQ:) Inc buyers in China are waiting longer for certain versions of its Model Y car, suggesting the electric-vehicle maker’s decision to cut prices is stoking demand in its second-largest market.
Tesla cut prices by 6% to 13.5% on Friday, bringing some of its auto prices to near BYD’s best-selling models in a step analysts said was a sign that a price war could be building as demand in China has faltered.
The waiting time for orders of the rear-wheel-drive and long-range versions of Model Y were a week longer on Monday than on Friday, Tesla’s website showed. The wait as of Monday was two to five weeks on those models. The wait time for all versions of the Model 3 and the performance version of the Model Y remained at one to four weeks as of Monday.
“It (the wait time) is an early indication that the price cuts are having their intended impact, which is to boost demand,” said CFRA Research analyst Garrett Nelson.
The company’s shares rose about 6% to close at $119.77 on Monday after losing 68% over the past 12 months. It was the most actively traded stock on U.S. exchanges, with more than 228 million shares changing hands.
As of Monday, Tesla had not made any adjustment to its January production plan for its Shanghai plant, with suspension of the assembly lines to start from Jan. 20 through the end of the month, a person with knowledge of the matter said.
Nelson added that Tesla’s vehicle production has exceeded sales for three straight quarters and the company has chosen to lower prices and take some additional downtime at the Shanghai factory to bring supply and demand back in balance.
GRAPHIC: Tesla’s chasm between deliveries and production widens (https://www.reuters.com/graphics/TESLA-DELIVERIES/dwvkddweopm/chart_eikon.jpg)
Angry Chinese owners who bought Tesla cars in late 2022 and missed out on the additional discount said they were waiting for a response from the company for their demand for some kind of compensation after a flurry of impromptu protests.
A Tesla representative told Reuters on Saturday that the company has no plan to compensate those buyers for price cuts they had missed. The company did not respond to a request for comment on Monday.
Some of the buyers in China said they had been led to believe that the further discounts would not be coming. Many were also looking to take advantage of a nationwide EV subsidy that expired at year end.
Chinese state media have largely opted not to cover the protests, which online videos showed happened in cities including Beijing, Shenzhen, Chengdu and Xi’an. Reuters witnessed a protest at a Tesla facility in Shanghai.
Comments on Chinese social media were largely negative toward the Tesla buyers who have protested, with many saying online they should have understood the terms of the contract.
Separately, Tesla as of Monday began offering discounts to buyers in Singapore who agreed to purchase existing inventory, adding that market to China, South Korea, Japan and Australia to those where it has offered new incentives.