Huawei-backed AITO follows Tesla and drops its prices in China

The race has just begun, albeit just in China for now - Tesla was first to introduce price cuts across its Model 3 and Model Y range and now AITO is following it. Chinese customers get new, lower prices for the M5 and M7 electric cars.

AITO is the first Chinese auto brand to respond to Tesla’s move and the others will surely follow. The company is cutting prices by RMB 8,000 (just over $1,000) and the decision takes an immediate effect.

AITO sells its cars through Huawei’s network of showrooms and via its website as well. Last month the company delivered over 10,100 vehicles with a total of 27,400 models delivered in Q3. The M5 SUV is about the same size as the Tesla Model Y and with its prices starting at RMB 288,600 the two cars are competing with each other. You can read our AITO M5 review here.

Tesla announced its price reductions on Monday and although it's great news for buyers, people who purchased one of the vehicles recently were less than impressed. Tesla confirmed that everyone who placed an order but hasn't picked the car up yet, will be able to take advantage of the new prices.

This is just a beginning, the price will have to fall and there will only be a handful of manufacturers who will resist Tesla’s move and keep the prices up. The Chinese EV industry is known for huge sales numbers and fast development but those results come at a price. The profit margins at the Chinese electric car manufacturers are wafer-thin and they have very little room to wiggle.

Many of the Chinese companies are already selling at a loss hoping to regain the losses down the road. It puts Tesla at a huge advantage with its industry leading profit margins, but it’ll be interesting to see how far this price-war goes.

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