Tesla and other Chinese EV automakers tried to put an end to the price war
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Several days ago Tesla and 16 Chinese automakers declared a truce in their long-standing price wars. The pact, designed to stabilize the largest EV market in the world, was signed at the China Association of Automobile Manufacturers (CAAM) in Shanghai.
A Unifying Pact: No More Price Disruptions
The “letter of acceptance for maintaining fair market order in the automobile industry” encompassed four essential commitments from the automakers, with the key one being to stop disrupting the competitive market order with abnormal pricing.
The agreement was signed by some of the biggest players in the Chinese domestic market, including Tesla, BYD, Nio, Li Auto, Xpeng, China FAW, Dongfeng Motor, SAIC, Changan Automobile, BAIC, GAC, China National Heavy Duty Truck, Chery, JAC, Geely, and Great Wall Motor.
Although the agreement was self-regulated and not legally binding, its significance could not be understated.
Sources from the Ministry of Industry and Information Technology asserted that regulating promotional activities, including avoiding reckless price cuts, is necessary for the health and growth of the Chinese auto industry.
This move appeared to signal the end to the price war, which had led to uncertainties in the market and delayed expansion plans, such as Tesla's Giga Shanghai expansion.
An Unexpected U-Turn: The Withdrawal of the Price Pledge
However, the CAAM has decided to retract the pledge made by the 16 automakers to refrain from "abnormal pricing."
The pledge, carefully coordinated by CAAM, was viewed as a ceasefire in the heated price war that had been affecting the profitability of the EV industry. The aim was to promote stability and healthy competition in the market.
Tesla's Move: A Sales-Boosting Strategy
Complicating the situation further, Tesla unveiled a global program on Friday. The program offers additional incentives to potential buyers through referrals from existing customers, a sales strategy long employed by traditional automakers.
While this move could be viewed as a savvy business decision aimed at boosting sales, it comes at a time when the EV industry in China was moving towards maintaining a fair market order. This has raised questions about whether Tesla's new initiative could reignite the pricing wars and undermine the market's stability.
CAAM's Response: Fostering Fair Competition and Independent Pricing
Reacting to this development, CAAM posted a statement on its website on Saturday, acknowledging that the pricing pledge had infringed upon China's antitrust law. As a result, it decided to withdraw the pledge from a list of commitments that the automakers had initially signed under the guidance of an official from the Ministry of Industry and Information Technology.
Despite the withdrawal, CAAM has stated that it will continue to encourage the 16 companies and other association members to strictly adhere to the antitrust law and engage in fair competition through independent pricing. This raises the question of what the future will look like for the EV market, not only in China but worldwide, as industry leaders navigate the complexities of pricing, competition, and market stability.
A New Era in the EV Industry
This development underlines the complexity of the global EV market. It also stresses the delicate balancing act required between ensuring market competitiveness, upholding antitrust laws, and creating a stable and sustainable industry that benefits consumers, manufacturers, and the wider society.
The unexpected withdrawal of the pledge, coupled with Tesla's new referral program, may redefine the landscape of the EV industry. As we progress, watching how automakers balance competitive pricing and maintaining market order will be intriguing.
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Tesla recently showed off Giga Small Haus, an interesting new display project hosted at Giga Berlin. The small new house is located just outside the main entrance of Tesla’s Giga Berlin factory, with a Quicksilver Model Y parked inside.
Giga Small Haus is powered only by solar and Powerwall 3 - disconnected from the local grid and from Giga Berlin itself. It serves as a live demonstration of Tesla Solar and Tesla’s Powerwall battery backup.
Giga Small Haus
The centerpiece of the display is a Model Y in Quicksilver - a beautiful pick for a beautifully lit house. However, that’s not the real focus here - it's the Powerwall and Gateway on the wall.
The Powerwall is the focus of Giga Small Haus, and there’s a display with some additional information on the wall. Part of the display also includes a screen that displays the current output of the Powerwall itself versus the consumption of Giga Small Haus, as well as the input from solar.
The interior exhibit of Giga Small Haus
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The text on the exhibit is divided into several sections. Here’s a translated and edited version of what we can see from Tesla’s images. Some additional text is obscured. If someone visits Giga Small Haus, let us know.
Powerwall
Powerwall is a home battery system that stores energy from solar panels, the electrical grid, or during off-peak hours and powers your home during the day or during a power outage.
With Powerwall, you can use self-generated solar energy during the day and night, thus avoiding high electricity costs. You can also store excess energy produced during sunny periods for use during times of low production or power outages.
Key Features
Energy Storage: Powerwall stores excess energy from solar panels or the grid for later use or during power outages.
Backup Power: In the event of a power outage, Powerwall automatically switches to battery power to ensure continuous power supply.
Integration: Powerwall can be seamlessly integrated with existing solar systems and other power sources.
Scalability: Multiple Powerwalls can be installed to meet higher energy storage needs.
Smart Energy Management: Powerwall works with Tesla's software to optimize energy consumption and reduce costs.
How Powerwall Works
Storage: During the day, when solar panels produce more energy than needed, the excess is stored in Powerwall.
Usage: At night or during times of low solar production, the stored energy is used to power the home, reducing reliance on the grid.
Backup: During a power outage, Powerwall automatically provides power to critical circuits, ensuring continuous operation of essential appliances.
Benefits
Cost Savings: By storing and using solar energy, you can reduce your electricity bills.
Reliability: Provides backup power during outages, ensuring your home remains powered.
Sustainability: Promotes the use of renewable energy by storing excess solar production for later use.
Overall, Giga Small Haus is an interesting real-life demo of what Powerwall and Solar can accomplish. It would be neat if Tesla built more of these displays - perhaps near major Delivery and Service Centers and at Giga Texas, Fremont, Giga Shanghai, and other facilities. Many Tesla owners have yet to learn about and experience some of Tesla’s Energy products.
Tesla has added the Acceleration Boost option to the Tesla store for owners of the 2024 Model 3 Long Range - specifically owners in Australia and China. Acceleration Boost is an upgrade that provides a significant performance boost, drastically narrowing the performance gap between the Long Range and Performance versions of the same model.
This upgrade will likely become available in Europe, Canada, and the United States in the next few days as Tesla updates its shops globally.
Acceleration Boost
This new Acceleration Boost is retailing for $3,000 AUD, or approximately $2,000 USD. That’s the same price for current owners of older Model 3 or Model Y Long Range vehicles, which all have the option to purchase Acceleration Boost through the shop.
The boost provides improved 0-100km/h (0-60mph) performance, bumping the 2024 Model 3 LR from 4.4s to 3.8s. The 2024 Performance version comes in at a blazing fast 2.9 seconds, so while it isn’t equivalent to just buying a performance variant in the first place, it is still a noticeable and significant upgrade.
Performance variants also come with a different front fascia vent for cooling, performance drive units, sport seats, adaptive suspension, 20-inch wheels, and Track Mode V3. That’s a significant number of additional features in the $10,000 USD price difference between the Long Range and Performance versions.
Should You Buy It?
If you’ve purchased a Long Range model and are itching to go just that little bit faster at every red light, this is the upgrade for you. It previously came with the cost of slightly reducing vehicle range, but the Tesla store doesn’t make a note of reduced range this time around. The 2023 Model 3 and Model Y Long Range models had an efficiency loss of about 5% due to the additional always-available acceleration and cooling.
You could drive in Chill mode to mostly negate that efficiency loss, but what’s the fun in driving in Chill when you just got Acceleration Boost? Anyhow, the shop listing for the 2024 variant doesn’t include this detail, so it's possible Tesla may have worked some more engineering magic.
Overall, if you’ve got the $3,000 AUD burning a hole in your pocket, some Tesla referral credits sitting around, or just want to go faster, it's definitely an upgrade many users find valuable.
