Chinese EV Stocks Dip Amid Tesla’s Plans for a New Budget Model in Europe

Chinese EV stocks decline as Tesla targets European market with a new, more affordable model, intensifying the competitive landscape.

Chinese electric vehicle (EV) manufacturers experienced a downturn in their stock prices following reports of Tesla’s intention to introduce a budget-friendly model in Europe. This move by Tesla could escalate competition in a sector already grappling with price wars and shrinking profits. The announcement has particularly impacted shares of companies like Nio Inc., which saw a significant drop.

Market Response to Tesla’s Announcement

The news of Tesla’s proposed €25,000 model, to be produced at its Berlin factory, has unsettled the market, with Nio Inc.’s shares falling over 5% in Hong Kong. Other Chinese EV makers, including XPeng Inc. and BYD Co., also felt the ripple effect, with their stocks experiencing declines. This development comes amid the European Union’s anti-subsidy investigations into Chinese EVs, adding another layer of complexity for these manufacturers.

Impact on Chinese EV Makers

Chinese EV companies have enjoyed a surge in monthly sales, yet investor confidence varies. Nio, despite its sales growth, continues to struggle with profitability, making it susceptible to negative market sentiment. The potential introduction of a more affordable Tesla model in Europe poses a direct challenge to Chinese brands, which are striving to balance cost reductions with the production of attractive, budget-friendly EVs.

Comparative Market Positioning

Tesla’s strategic move to produce a cheaper model in Germany could sharpen its competitive edge against Chinese counterparts. For context, BYD’s European offerings include the €40,000 Atto 3 SUV and the €28,900 Dolphin hatchback, positioning Tesla’s new model as a potentially significant contender in the affordable EV segment, which is crucial for capturing a broader consumer base in the cost-sensitive European market.


The anticipated entry of Tesla’s economically priced model into the European market could reshape the competitive dynamics, putting pressure on Chinese EV makers to innovate and adapt. As the industry evolves, the focus on affordability and appeal becomes increasingly central to gaining a foothold in the international EV marketplace.