Tesla is that company which has been continuously dominating electric vehicles industry from last few months. However, the company yesterday decided to reduce the prices of their electric cars in China because of the recent tax relief made by the Chinese government for the US made automobile products. The US and China have both mutually decided to stop their trade war for ninety days and due to which China a few days ago decided to reduce the tax rate on the US made cars from 40 percent to 15 percent. Regarding this decision, the Tesla agreed to cut their product’s prices which will now be offered at low prices in the Chinese market.
Electric vehicle makers Tesla Inc. Suffered a lot due to trade war issue and to sell their cars in the Chinese market, the company had to raise the prices of their cars which negatively impacted on company’s sale. However, in a recent G20 summit both the countries US and China decided to stop this trade war and so far this decision is giving a lot of good relief to the tech businesses in the USA who have a broader market in China. According to the company’s report, Tesla Inc. earns more than 17% of its total revenue through China and Tesla is hugely investing in their upcoming model Y Crossover which might gain more success in the Chinese market.
Many companies like Tesla, Ford are trying to capture the Chinese market, and that’s the reason Tesla has already decided to build a plant in Shanghai which will benefit a lot for the Chinese government since they will earn tax from such company’s revenues. However, it will be interesting to see whether these sudden changes in the prices of cars are going to stay long term or not because all of these price fluctuations depends upon the trade war.