EV competition heats up as Tesla cuts prices

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While demand for electric vehicles (EVs) has slowed over the past twelve months, production has remained strong, resulting in a growing number of manufacturers now having to cut prices as a result.

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The latest is Tesla which has now cut prices in several of its major markets, including China and Germany. The tech giant has seen falling sales and is faced with intense competition from rivals, not least Chinese EV manufacturers.

Tesla reported this month that its global vehicle deliveries in the first quarter fell for the first time in nearly four years and it has said that it needs to better match prices with production levels and demand.

The current EV price war started over a year ago when Tesla started cutting prices in the US, and those cuts have now spread globally to other key markets.

High purchasing costs, range anxiety, reliability issues, and availability have all had an impact on market demand, while Chinese competitors are now rolling out much cheaper models.

In China, the National Development and Reform Commission (NDRC) expects more than 110 new energy vehicle models to be launched this year, intensifying competition, but also signifying a significant oversupply in the market.

The slowdown in sales is certainly impacting EV manufacturers with Tesla announcing that it was laying off 10% of its global workforce while Elon Musk, Tesla’s CEO, has postponed a trip to India in which he was expected to announce plans to enter the SE Asian market.

While the future is certainly going to be electric it does appear that its adoption is proving more challenging than many in the industry expected.