In China, Apple and Tesla encounter Headwinds
“Tesla will point to supply disruptions and lockdowns as the main problem in China in 2022,” said Bill Russo, the CEO of Shanghai-based Automobility.
“While these are real headwinds, it cannot hide the fact that demand has softened for a variety of reasons, and their order backlog is 70% smaller than it was prior to the Shanghai lockdown.”
In the final weeks of March 2022, Shanghai experienced lockdowns as the government worked to contain a Covid outbreak.
Headwinds
Investors worry that Tesla would lower prices in order to attract customers, which would put pressure on profits.
Tesla reduced the cost of the Model 3 and Model Y in China in October, going back to the previously agreed pricing for 2022.
In China, increasing domestic rivalry from businesses like Nio and Li Auto is another impediment for Tesla.
New models from domestic competitors will also be introduced this year at reduced prices.
“Tesla’s models have been in the market for a while and are not as fresh to the Chinese consumer as other alternatives,” offered Russo.
“What we are learning is, EV product life cycles are short as they are shopped for their technology features.”
“Buying an older EV is like buying last year’s smartphone,” he continued.”
“They need new or refreshed models to reignite the market. Just pricing lower can damage their brand in the long run.”................................Read More
Source:- US Insider