Mercedes-Benz has cut prices of its electric models in China the premium carmaker resorted to the move following a 6.7% decrease in market share. The price cut goes as high as $33,000.
Waiting for the world to get hit by a new major financial crisis, while emissions regulations are getting ever stricter, the car market is changing. Mercedes saw a major drop in its market share in China, its most important after its home market, Germany.
Yet the demand for electric cars in China is growing. According to a Goldman Sachs report, sales of EVs are up 110% year-to-date. National incentives and tax cuts motivate customers to go full electric.
Reuters reports that analysts expect a price war in the coming months. And it has apparently started already. Tesla decided to cut prices for its Model 3 and Model Y in China last month by 9%. The move follows Elon Musk’s prediction that “a recession of sorts” is underway. Just days after the price change, Ford Motor’s EV branch and Huawei-backed EV brand Aito followed. Most likely, these decisions will put pressure on other carmakers to make their move on the electric car market in order to stay competitive.
Mercedes-Benz is now following in Tesla’s footsteps with a significant price cut. Insideevs.com reports that the carmaker’s local website displays a base price of 478,000 yuan ($66,784, at the current exchange rate) for the Mercedes EQE, down from 528,000 yuan ($73,770), the price one day before.
A similar change goes for the EQS flagship, 2022 World Luxury Car of the Year. Before the decision went into effect, the electric sedan used to start at 1,190,000 yuan ($166,261). Customers can now start negotiations from 956,000 yuan ($133,568). That is a cut of approximately $33,000.
Furthermore, dealerships in China will keep offering subsidies to customers who bought the cars before the price adjustment took place. An insider who declined to be named stated for Reuters that the company was expecting the EQS SUV to become more popular than the sedan, considering that the Chinese customers prefer to be chauffeured while enjoying the space and features the rear can provide.