Tesla Inc TSLA and local electric vehicle rivals such as Nio Inc NIO are growing the electric vehicle segment together in China and not eating into each other's market share, Zhongtai Securities analysts said, as reported by cnEVpost.
What Happened: Chinese electric vehicle makers such as Nio, Xpeng Inc XPEV, Li Auto Inc LI and BYD Co BYDDY along with Tesla reported robust delivery numbers in June.
Tesla has stepped up the competition in China after introducing a lower-priced Model Y variant. The strategy has paid off as the Elon Musk-led company has reportedly secured a flood of orders but raised fears of doom and gloom for China's new carmakers.
Zhongtai Securities analyst sees the move as overblown as China's new carmakers are competing differently both in terms of demand and pricing.
Why It Matters: Tesla has introduced a more affordable variant of electric mid-size SUV Model Y in China, which qualifies for a subsidy as well as it is sold under RMB 300,000 ($46,000), the benchmark. Deliveries are expected to begin in August.
Tesla’s biggest rival Nio at the moment operates a portfolio that is more expensive and not eligible for the subsidies as they are all priced over the RMB 300,000 limit.
Ford Motor Co F too has added another variant of its all-electric sports utility vehicle Mustang Mach-E in China for under RMB 300,000 ($46,000), thus qualifying it for state-led subsidies.
Price Action: Tesla shares closed 0.31% higher at $646.22 on Monday. Nio closed 1.29% higher at $43.35.
Click here to check out Benzinga's EV Hub for the latest electric vehicles news.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.