What happened: Tesla is cutting the price of its Model S and Model X cars in China by 12 to 26% respectively to absorb the impact of the US-China trade war on Chinese consumers. In response to the trade tensions from the United States, China imposed extra tariffs on U.S. imports into the country. The move hurts Tesla’s China business, which imports all the cars it currently sells in the market.
Why it’s important: Automobile is one of the industries that suffered the most from the China-US trade tension. Tesla has adjusted its pricing strategy in China several times this year. Lowering price at the cost of the company underlines intensifying competition in China, the world’s largest car market where electronic vehicles are rising fast. But local experts believe that the company has more space for lowing the price of its Model 3, which is going to be manufactured by its Shanghai-based Gigafactory by 2020.