China car prices ‘well-supported’ after Tesla price cut

2022 Mercedes-Benz EQS EV


Mercedes-Benz finance chief on Wednesday informed CNBC the automaker’s pricing of its autos in China is “very well-supported” immediately after U.S. electric car giant Tesla slashed prices.

“We certainly see the need getting nicely but also we see the pricing ranges we set into the industry becoming effectively-supported in the industry in China,” Harald Wilhelm, CFO of Mercedes-Benz group instructed CNBC’s Julianna Tatelbaum in response to a issue on Tesla slashing price ranges.

“We are not shooting for the mass, we are capturing for the leading finish, for the luxurious phase, and this just one ordinarily proves to be much more resilient also in occasions of macro uncertainties or troughs.”

China is the biggest current market for Mercedes-Benz. The German auto team sold 222,641 vehicles in the region in the third quarter of this year, up from 132,579 units in the exact time period previous yr.

The CFO’s remarks arrive just after Tesla on Monday slashed the price of its Design 3 and Design Y vehicles in China, 1 of the firm’s most crucial marketplaces.

That was just after Elon Musk’s company lifted the selling prices of its motor vehicles earlier this year as a final result of growing raw substance costs.

Tesla did not give a cause for the rate cuts. But the Chinese economic system, which did see a bump in the third quarter, is continue to facing a variety of worries such as the country’s rigorous Covid containment coverage which has weighed on client appetite.

Tesla’s price tag slice arrives as level of competition ramps up in China from domestic electric powered motor vehicle companies these types of as Warren Buffett-backed BYD as effectively as upstarts Nio and Xpeng.

Whilst Mercedes-Benz nevertheless relies seriously on income of common combustion engine automobiles, it is ramping up its electrical vehicle abilities, which is probable to set it in a lot more immediate competition with Tesla. In the 3rd quarter, Mercedes-Benz bought 84,850 electric powered automobiles, up 39% 12 months-on-year. But they still only account for around 16% of the company’s full quantity.

Mercedes-Benz’s Wilhelm also addressed the offer chain challenges that have been plaguing automakers, in certain a shortage of crucial semiconductors.

Wilhelm stated the provide chain problem has “enhanced” but he remains “cautious,” expressing that need is “becoming constrained by offer” — of semiconductors in unique.

He mentioned that some of these troubles will continue to be in 2023.

Mercedes-Benz claimed 3rd-quarter earnings of 5.2 billion euros ($5.18 billion), up 83% year-on-yr.