Tesla's Aggressive Price Drop in China Makes Sense

Tesla is reducing its prices in several regions

Tesla (edited by Not a Tesla App)

Tesla stock price is down, deliveries missed expectations last quarter, and significant price drop — in China. Those are the major concerns swirling around the electric car manufacturer as investors took to Twitter to complain about the slash in prices overseas. However, there is a significant difference between the EV market in China compared to most other regions worldwide, especially North America.

Tesla dominates the market almost everywhere, except China. Unlike the dinosaurs in the North American automotive sector, Chinese car manufacturers have been developing and producing electric vehicles for a long time. While Tesla has had countries like the United States and Canada all to themselves for buyers wanting an electric vehicle, it’s not so easy in China. Telsa has to convince consumers to try something other than the BYD Song Plus or the Wuling Hongguang Mini EV.

Tesla has Competition in China

BYD started up in China in 2003, and by 2008 it was building the best-selling hybrid cars in the country. In 2009, several years after the carmaker achieved the top sales in the country. BYD was then converted to a fully electric vehicle, making it much easier for buyers to adapt to EVs while sticking with the brand they already trusted.

Then there is the horrendously ugly and ridiculously cheap Wuling Hongguang Mini EV. At a starting point of $4,500, anyone can hope no one sees them in this EV. The automaker hit the China market hard starting in 2020 and has not surpassed 500,000 deliveries.

Tesla’s main competitors have two particularly important advantages, BYD has brand loyalty, and Wuling Hongguang Mini EV is cheap. Therefore, it only makes sense that Tesla is aggressive. The Model 3 is now the cheapest it has ever been in China, and the Model Y has become much more affordable.

Tesla Cuts Prices

The company already dropped prices a few months ago, and now it's dropping them again. A RWD Model 3 is now $33,500 USD, when it was nearly $39,000; the same car in the United States goes for about $47,000. The RWD Model Y (not available in North America) is now $37,800 USD, down from about $42,000.

Following the announcement in China, Tesla has followed with reducing the prices in several other regions as well. The prices of the Model 3 and Model Y have been reduced in Australia, with price reductions in the 2-4% range, depending on the model.

In addition to China and Australia, Japan is also seeing the price of the Model Y reduced by up to 10%.

While these prices may be tough to swallow for someone in North America, consider that Tesla constantly changes prices to match what the market will pay. This practice has removed the slimy car salesman tactics that plagued the industry for decades. So, while it may seem unfair, Tesla owners must understand that the company doing well in all markets worldwide is vital to its survival as more competition emerges.

It's also possible that we'll see some price reductions in the U.S. as well. With the EV tax credit going into effect this January, Tesla aims to allow as many models to qualify as possible.

A Closer Look at Tesla's Updated Energy App - What's Changed

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One of the big undocumented changes in Tesla’s 2024 Holiday Update was the changes to the Energy app. While the Model S, Model X, and Cybertruck received the Consumption tab in the Energy app for the first time, the changes made for those models also carried over to Model 3 and Model Y.

The Consumption tab lets you view your vehicle’s consumption over recent trips as well as view projected range estimates based on historical usage, but it now offers different options.

Sadly, legacy Model S and Model X vehicles produced before the 2021 refresh still don’t have access to the Energy app at this time.

Energy App

Tesla’s Energy App previously let you view a lot of in-vehicle data on what is consuming energy and how to improve your energy consumption. It was previously refreshed in 2022 and brought Drive, Park, and Consumption tabs to help compare actual vehicle energy consumption versus what you’d expect from the EPA ratings.

The old Energy App's consumption page.

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Key Changes

The Energy App has seen a lot of changes - mostly in the name of simplicity and reducing confusion. Some changes reduce functionality, but others bring even more. All of these changes impact the Consumption tab - the Park and Drive sections are unchanged.

Distance

Previously, you were able to switch the graph on the Consumption tab to show the last 5, 15, or 30 miles. Instead, it is now a static display of the last 200 miles (or 300km). This means your last 200 miles of driving - whether it's a single trip or multiple trips. Your range prediction and energy usage are now based on 200 miles of driving instead of the previous selectable distance.

This allows for a more reasonable range prediction as small bursts of high-energy usage, such as time spent accelerating to highway speeds from an offramp, are now less of an impact and are instead averaged out by regular driving.

However, for those who love to take their Teslas to the track or tow regularly, this makes the consumption significantly less useful because you can no longer see your actual energy usage for the type of driving you’re doing. This could be fixed with a reset button or by adding the ability to select your distance — similar to before.

Projected Range and Average Wh/mi

Unfortunatley, the Instant Range button has been removed, and the graph is now locked on what was previously the Average Range. Essentially, you cannot view your real-time range based on current instantaneous consumption - but you can view the overall projected range.

Additionally, average Wh/mi and projected range are still displayed - but in different areas compared to before. The projected range is displayed on the center-left side of the graph, while the average Wh/mi is now displayed at the top of the screen.

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Compare Vs EPA

Another new feature is that the average range is now compared to the EPA estimated range in terms of wh/mi. You’ll be able to see whether your driving style and conditions put you over or under the EPA estimate in a pretty quick way, which is helpful.

This new comparison is located just under your average Wh/mi.

Small and minor adjustments to your driving style - like not taking off like an electric lightning bolt at every red light - will make a big difference to your range. Don’t worry - we know its hard, we love doing it too! Other things - such as driving downhill versus uphill, will have an impact that you can’t necessarily avoid unless you’re old enough that you went to school uphill both ways.

Total Vehicle Consumption

The final new feature is a total vehicle consumption number at the bottom left, under the chart. It will tell you how much energy you’ve consumed over the distance you’ve driven so far. This is a convenient way of seeing exactly how much energy you’ve used.

Bug

There’s currently a bug in the way the Y-axis is labeled. The yellow area of the graph means the vehicle is using energy, while green means the vehicle is generating energy through regenerative braking. However, the Y-axis is currently mislabeled and shows generated energy as using about 100-200 Wh/mi.

The confusion appears to be due to the dark gray line, which looks like “0” on the Y-axis but actually represents the vehicle’s rated range. We would expect this to be Y-axis 0, since above the line the graph is yellow, and underneath it, the graph is green. However, this line is at about the 240 Wh/mi mark but will vary depending on the vehicle.

Due to this bug, it’s currently not possible to see how much energy is being generated.

Dynamic Y-Axis

The Y-axis in the Consumption tab is now dynamic - it will expand and contract automatically based on the driving data. We’ve seen it go from 400 Wh/mi all the way up to 800 Wh/mi. You likely need to be in a Model S Plaid or Cyberbeast with Launch Mode to see numbers much higher than that.

We’re sad to see the X-axis get locked to 200 miles, but being able to see total vehicle consumption and comparing average consumption against what’s rated is equally, if not even more valuable.

Overall, the new and improved Consumption tab is simpler and doesn’t require user input. While it takes away some features, it makes it easier for drivers who may not use it regularly. The most important piece is the projected range, which is now easier to see and understand unless you're towing and need the historical usage erased because it’s now irrelevant to your current drive. Hopefully, Tesla will allow you to scrub the graph horizontally in the future, adding the ability for the user to adjust the X-axis dynamically.

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Tesla Smart Voice Assistant Coming - Vehicle Responds for First Time

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If you hop into your Tesla and say ‘Hi’ or ‘Hello’ after pressing the Voice Command button, there is a good chance it’ll reply with “Hello!” This is the newest and most interesting piece of news pointing us to the conclusion that a Tesla voice assistant is on the way.

Previously, if you tried this, it would simply return “Command not understood.” This is the first time the vehicle is responding and interacting with the user.

Experience It Yourself

You’ll need to have your vehicle language set to English. Once that’s done, you can use the voice command button on your steering wheel or yoke - for the Model 3 and Model Y, push the right wheel button, and for the Model S, Model X, and Cybertruck, press the button. Then go ahead and say Hi or Hello.

The Hello! response may even have regional differences. For a German Tesla owner, after setting his language to English, the response came back as “Hallo.” We’re interested to see what the responses may be in other regions, so let us know if you notice anything interesting.

We’ve tried a few other basic things, but it seems that, for now, the vehicle only replies to a simple greeting. Asking it what time it is or the $TSLA stock price doesn’t seem to do much yet - unless you’re in China with the updated Smart Assistant.

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Server-Side Update

This update appears to be happening over Tesla’s voice system backend and doesn’t require the Holiday Update. Users who aren’t on the Holiday Update are reporting that they’re getting this new response as well.

We already know that Tesla interprets speech remotely, and the driver’s voice is not processed in the vehicle. Instead, the voice snippet is transmitted to Tesla’s servers, where Tesla processes it and sends a response back to the vehicle so that the vehicle can interpret it. This is unlikely to change with a smart assistant, as Elon Musk has already said that Grok will still process data server-side instead of on-device.

Many users recently also noticed significant improvements to voice commands, saying that the system understands them better and that responses now come back faster.

All of these things point to a new backend system for voice processing that Tesla is testing. It’s not unusual for a company to switch to a new backend process but keep the capabilities the same as the legacy system until it’s ready to roll out the new features. At that point, it’s simply a flip of a switch to allow the new capabilities.

The new smart assistant that was rolled out in China is mostly a backend change, with the in-vehicle experience largely remaining the same. The activation method (button press) and user interface remain the same. What changed is the response that comes back from the server, and the assistant gained a voice. The new voice we receive with a smart assistant could very well be the new voice users are experiencing in the navigation system in newer vehicles.

Below is a video of the voice assistant in China:

Vehicle Support - Intel?

When China received the Smart Assistant, it was locked to cars equipped with AMD Ryzen processors only. Shortly after its initial launch, it became available to older cars with Intel Atom processors as well.

However, we’re not sure whether it would apply to legacy Model S and Model X owners. A legacy vehicle owner had their vehicle report “Command not understood” when they tried the ’Hi’ voice command.

Grok for Tesla

Elon has previously mentioned that Tesla vehicles would receive Grok AI. Grok, as of yet, still doesn’t have live speech support like other LLM models such as OpenAI’s ChatGPT or Google’s Gemini. However, a major update to Grok just brought massively improved image generation via a new model called Aurora.

xAI has been hard at work improving Grok, and we’re sure that live speech support is on its way soon. Once that feature arrives on X, Tesla will likely be well-positioned to enable a Grok-powered smart assistant fleet-wide with a flick of a switch.

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