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Europe’s automobile and parts index slid 4.06% on the move, which highlights the challenges for foreign automakers struggling to break into China’s growing EV market.
Sales of EVs in China are up 110% year-to-date, a Goldman Sachs (NYSE:GS) report said, as incentives like tax breaks for kicked in to motivate consumers to move away from combustion engine cars.
But some analysts expect a price war in the coming months, with industry-wide sales projected to slow amid softening consumption and stiffening competition.
Chinese EV brand Aito, launched by Huawei and Seres Group, lowered prices in late October by around $1,100 on two of its models, while Tesla (NASDAQ:TSLA) cut prices by up to 9% after Chief Executive Elon Musk said a “recession of sorts” was underway.
Sales of the four EVs affected by Mercedes-Benz’s price cuts accounted for 3% of its total sales in China in the first eight months of 2022, data from the China Passenger Car Association showed.
The retail price (MSRP) for the EQE crossover vehicle was cut by 9% and the luxury EQS limousine’s price by 11-22%, Mercedes-Benz said in a statement on its website.
“The Top-End electric vehicle segment in China is still evolving … Mercedes-Benz is repositioning certain EQ models in China,” a spokesperson said.
Mercedes-Benz will offer subsidies through dealers to buyers who purchased those cars before the adjustments.
It had not expected soaring sales in China for the EQS, whose design was geared more towards European and U.S. customers who prefer a flatter shape, a source close to the company said.
It had higher hopes for the EQS-SUV which was better suited for Chinese high-end customers who are likely to have a chauffeur and so prefer more space and headroom in the back, the source, who declined to be named, added.