Chinese automaker Li Auto has followed in Tesla's footsteps by reducing the prices of their entire existing lineup, except for the new Li L6 model. This move resulted in a more than 7% drop in Li Auto's shares during premarket trading on Monday. The price cuts affect new orders and existing undelivered pre-orders for several Li Auto models, including the Li L7, Li L8, Li L9, and Li Mega. The price reductions range from 18,000 to 30,000 yuan, and the company is also offering cash refunds to customers who already took delivery this year. This price war in the EV market in China has been further intensified by similar moves from other automakers like Tesla, Geely Auto, XPeng, and Leapmotor.
Key Takeaways
- Li Auto becomes the first Chinese automaker to match Tesla's price reductions.
- Price cuts affect all existing models, except the new Li L6, with drops up to 30,000 RMB.
- Li Auto shares fell by more than 7% in premarket trading following the price adjustments.
- Li Auto reports strong initial sales of over 10,000 units for the newly launched Li L6 electric vehicle.
- The EV price war in China intensifies as other major automakers also reduce their pricing.
Analysis
Chinese automaker Li Auto's decision to slash prices across its range, closely mirroring Tesla's actions, has sent ripples through the market. The substantial 7% drop in Li Auto's shares during premarket trading clearly signals investor concern. This move impacts not only Li Auto but also its competitors, such as Tesla, Geely Auto, XPeng, and Leapmotor, as they engage in an intense price war. The direct cause of this price reduction seems to be fierce competition in the Chinese EV market, with potential long-term consequences including diminished profit margins and the erosion of brand exclusivity for Li Auto and other players.
Did You Know?
- Li Auto becomes the first Chinese automaker to match Tesla's price reductions.
- Price cuts affect all existing models, except the new Li L6, with drops up to 30,000 RMB.
- Li Auto shares fell by more than 7% in premarket trading following the price adjustments.