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Aito, a brand jointly developed by Huawei and Chongqing Sokon's brand Seres, has offered customers one-time payment reduction of RMB8,000 when they pay the balance on delivery of two electric SUV models M5 and M7, Chinese digital media outlet The Paper learned from Aito retail stores on Tuesday.

Aito’s promotion came a day after Tesla launched its first price cuts in China since the beginning of the year. Tesla China announced price reductions for all the versions of its Model 3 and Model Y on Monday.

The Model Y Long Range, saw the biggest adjustment as it now costs RMB357,900 (US$36,710), suggesting down RMB37,000, or a decline of 9.4%. The Model Y Rear-Wheel Drive (RWD) and the Model Y Performance start at RMB288,900 and RMB397,900 respectively, cutting by RMB28,000 and RMB20,000. The starting price of the Model 3 RWD was trimmed by RMB14,000 to RMB 265,900, while the Model 3 Performance sold at RMB349,900, down by RMB18,000.

For Tesla’s Chinese rivals, the more powerful impact on EV sector is that the listed price of Model Y RWD dropped below RMB300,000, which allows the car buyer to enjoy the national subsidy of RMB10,000 for any new energy passenger cars cost less than RMB30,000.

The move was unsurprised for the industry. Tesla was reported in late September that it could soon reduce the prices for Model 3 and Model Y and the latter was expected to reduce up to RMB40,000. While Tesla dismissed the report, its new promotion, which offered one-time subsidy of RMB8,000 to new Model 3 and Model Y vehicles delivered from September 16 to 30, was seemed to pay way for its future price cuts.

Model Y is now ranked the top selling premium SUV priced at more than RMB300,000 in China, according to the China Passenger Car Association (CPCA). Data from the industry body showed the sales of Tesla China from the January to September 2022 surged 55.4% year-over-year (YoY) to 318,000 units, which include 219,100 Model Ys with a 135.8% YoY increase.

Soochow Securities expected Tesla’s move could lead to a wave of price cuts in China as major automakers like BYD and Geely as well as emerging EV startups such as NIO and Xpeng may follow up, directly affecting new energy vehicles with price tag between RMB200,000 to RMB400,000.

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