Part 5/11:

Tesla, by contrast, was the first to slash prices in response to market pressures, and as a profit-driven leader, it could afford that move due to its large profit margins. Morgan Stanley noted that Tesla's willingness to cut prices is closely tied to its scale and cost leadership; the company sets the standard for EV pricing.

This price war isn't solely led by Tesla, but the Chinese market indicates that Tesla's aggressive pricing strategies have instigated global ripple effects. Byd and others follow suit, attempting to compete in this newly ruthless environment.

Falling Costs and Market Recovery Indicators

Several key factors support the expectation of ongoing price reductions:

• Lithium prices are consistently decreasing, reducing battery costs.