The price cuts of EVs have spread from China to the world.

The low - cost version of Tesla's "Model Y" (right)

Tesla has cut the minimum price of its main models in the United States by 10%. Even in Japan, where the penetration rate of EVs ranks at the bottom among developed countries, the recommended retail price of Nissan's main EV, "LEAF (Chinese name: Lingfeng)", has been reduced by about 60,000 yen. Chinese companies such as BYD are intensifying the price - cut pressure...

On October 7th, Tesla, the giant of pure - electric vehicles (EVs) in the United States, cut the minimum price of its main models in the United States by 10%. Nissan Motor will also set a lower price for its main pure - electric vehicle that will be fully improved in 2026 in Japan. In China, where EVs were the first to be popularized, due to insufficient domestic demand leading to increased inventory, companies are committed to price cuts and exports. "EV deflation" seems to have begun to spread globally, but due to the disruption of the supply chain caused by the Sino - US confrontation, there are limitations to cost reduction.

On the 7th, Tesla cut the prices of two main models in the United States and other markets. The minimum price of the SUV "Model Y", which is sold in large quantities at a low price, dropped to $39,990, a decrease of $5,000 from the original minimum price. The battery capacity is reduced, and the cruising range is shortened by 10%.

At the end of September, the Trump administration in the United States abolished the $7,500 tax credit finalized by the previous Biden administration. The actual price of popular domestic models in the United States, represented by the Model Y, increased by 20%. Tesla immediately launched a low - cost model to prevent customer loss.

On the same day in the US stock market, Tesla's stock price fell by 4%. Elon Musk, the CEO of the company, has always expressed his intention to launch a low - cost car priced below $30,000. Five years ago, Tesla's share in the US pure - electric vehicle market exceeded 80%, but it has now dropped to more than 40%. Investors believe that a 10% price cut is not enough for a comeback.

Tesla's EVs for the US market are produced entirely in the United States, from batteries to the whole vehicle, but it has built a global supply chain for parts and raw materials.

In particular, most of the rare earths required for battery and motor production rely on imports from China.

China is strengthening the management of rare - earth production to gain an advantage in tariff negotiations with the United States. For Tesla, which has a large demand, it is not easy to find alternative suppliers. The long - standing Sino - US confrontation is considered the main factor hindering cost reduction.

The price - cut trend is not limited to Tesla. In the United States, General Motors and Ford Motor are gradually reducing the prices of their EVs. Both companies plan to launch new EVs priced below $30,000 in the future.

Even in Japan, where the penetration rate of EVs ranks at the bottom among developed countries, price cuts are underway. On October 8th, Nissan announced that the recommended retail price of its fully improved main EV, "LEAF (Chinese name: Lingfeng)", in Japan is set at about 5.19 million yen (about 243,600 yuan) for the standard model. This is about 60,000 yen lower than the previous comparable model (about 5.25 million yen).

In Japan, Chinese companies such as BYD are intensifying the price - cut pressure.

Against the background of the slowdown in the growth of the Chinese EV market, they are launching a price offensive to expand into the Japanese market. In September, BYD once cut the price of its popular EV by 500,000 - 1.17 million yen in Japan.

The global decline in EV prices is also closely related to the enhanced strength of Chinese manufacturers in the automotive battery market. Contemporary Amperex Technology Co., Limited (CATL), which ranks first in the global market share, will cooperate with Stellantis in Europe to invest in a battery factory.

This article is from the WeChat public account "Nikkei Chinese Net" (ID: rijingzhongwenwang). Authors: Kawakami Azusa and Ochiai Shuhei. It is published by 36Kr with authorization.