Asian Tech Press (Jan 6) -- Tesla Inc. on Friday kicked off the first round of significant price cuts for 2023 in China.

Tesla announced Friday that it has started to significantly reduce the prices of its China-made cars, with the Model 3 starting at 229,900 yuan ($33,557) and the Model Y starting at 259,900 yuan ($37,936), a reduction of up to 13.41%, hitting the lowest prices ever.

The U.S. automaker also officially released the prices of the new Model S and the new Model X in China, starting at 789,900 yuan ($115,297) for the new Model S dual-motor all-wheel drive version and 1,009,900 yuan ($147,409) for the Model S Plaid three-motor all-wheel drive version.

In the past few months, Tesla has launched several price reduction and promotion strategies. In October 2022, Tesla's China unit kicked off its first big price cut in 2022, with reductions of 14,000 yuan to 37,000 yuan ($5,401) for the Model 3 and Model Y models, respectively.

Market thought that Tesla's price cut in October last year was an attempt to maximize its 2022 deliveries in a bid to meet its annual target.

Tesla is facing weak demand and declining sales. According to the latest estimates from the China Passenger Car Association (CPCA), Tesla delivered 55,796 Chinese-made electric cars in December, a 44.4% decline from a year earlier, the lowest level in five months.

Some analysts argued that while Tesla's production capacity could reach around 2.4 million units in 2023, macro indicators are slowing in several regions where the company operates. The company's recent price cuts and insurance incentives, among other things, also indicate that it is facing a slowdown in demand globally.

Tesla released figures Tuesday showing it produced 1.37 million units in 2022, with 1.31 million deliveries.

(US$1 = 6.851 yuan)