Price war intensifies as Tesla, Xpeng and Nio announce deep cuts

The price war in the domestic car market intensified on the first day after the Spring Festival holiday, with both American auto giant Tesla and Chinese new-energy vehicle company Xpeng announcing significant incentives to boost sales.

Tesla China is offering an 8,000 yuan (US$1,095) insurance subsidy on its Model 3 series until February 28.

Prices will start at 227,500 yuan with zero interest rate for five years of purchase and charging rights.

This is the first time that Tesla's insurance subsidy has covered all Model 3 models, including the high-performance edition, with a rare discount package of both insurance subsidy and a 5-year zero interest rate policy.

Xpeng also announced a 5-year zero-interest policy, with a maximum discount of 57,000 yuan, effective until February 28.

The policy covers the Xpeng X9, with other models such as the Xpeng G6, Xpeng G9, and Xpeng P7i enjoying a zero down payment and a 3-year interest-free policy, with discounts of up to 28,000 yuan.

Nio also announced the implementation of a 5-year zero-interest limited-time purchase policy from February 1, with a maximum down payment of 20 percent and no handling fee.

Latest sales figures show that Xpeng delivered 30,350 new cars in January, a year-on-year increase of 268 percent, to return to the top of the sales of domestic NEV brands.

Nio delivered 13,863 new cars in January, up 37.9 percent year on year, of which 7,951 new vehicles were Nios and 5,912 its Onvo brand.

Tesla sales in several European markets plummeted this year, with sales in France dropping 63 percent year on year, according to data from the French trade association La Plateforme Automobile.

Similar declines could be spotted in Sweden and Norway.