March 20, a Tesla price increase message rushed to the top of Weibo’s hot search.
Tesla China news, starting from April 1, the price of Tesla Model Y models will be raised by 5,000 yuan; at the same time, the current 8,000 yuan official existing car insurance subsidy policy and the highest 10,000 yuan paint reduction policy will also expire on March 31. Calculated in this way, the actual price increase range of Tesla’s price adjustment in the Chinese market is up to 23,000 yuan.
In response to the above news, as of the time of submission, Tesla has not yet responded.
Currently, Tesla Model Y has three models on sale, with a price range of 258,900-363,900 yuan. The delivery cycle of the three models is 2-6 weeks. The official website shows that there are spring courtesy subsidies for car purchases, including the current Model Y rear-wheel drive version of the existing car. By purchasing the corresponding auto insurance through the cooperative insurance institution, you can enjoy an 8,000 yuan insurance subsidy, which needs to be delivered before March 31; the current and original Model Y existing cars, the designated paid paint only needs 2,000 yuan (the difference will be reduced before delivery), which needs to be delivered before March 31; the current and original Model Y rear-wheel drive version of the existing car, you can apply for an annual interest rate as low as 1.99% (equivalent to an annualized interest rate of 3.65%, applicable to some banks), and the annual interest rate of other cars on sale is as low as 2.5% (equivalent to an annualized interest rate of 4.58%), which needs to be delivered before March 31.
It should be noted that this price increase is not only for the Chinese market. On March 15, market news said that the price of all Model Y models in the US market will also increase by $1,000 on April 1; on March 16, there was also news that Tesla will increase the price of Model Y in some European countries from March 22.
As of now, Tesla’s globally available models include Model 3, Model Y, Model S, and Model X, a total of four models. Among them, Model Y is Tesla’s first domestic SUV model, which was launched in 2021. In October 2023, Tesla’s new Tesla Model Y was launched, with a total of three models, with a price range of 263,900-349,900 yuan. Among them, the rear-wheel drive version is priced at 263,900 yuan, the long-range version is 299,900 yuan, and the high-performance version has a range of 349,900 yuan.
Model Y is currently an important source of sales in Tesla’s Chinese market. Taking the retail data in February this year as an example, the sales of Model Y were 22,537 vehicles, accounting for 74.77% of the total retail sales (30,141 vehicles), while the sales of Model 3 were 7,604 vehicles, far lower than Model Y.
Industry insiders pointed out that after entering 2024, Tesla’s high-frequency price adjustments may mean that it is facing greater growth pressure. Previously, Tesla warned that the growth rate of automobiles in 2024 “will likely be significantly lower” than in 2023. According to the wholesale sales data of the Passenger Vehicle Association, in February, Tesla’s wholesale sales in China were 60,365 vehicles, down 15.5% month-on-month and 18.9% year-on-year, the lowest level since December 2022. Of course, the main reason for the decline in sales may be related to the Spring Festival holiday.
As for why the domestic Model Y has increased by 5,000 yuan this time? Industry insiders believe that this move may be to promote sales and reduce inventory, allowing users to place orders as soon as possible. In contrast to the auto market, since the beginning of the Spring Festival in the Year of the Dragon, the competition in the domestic price war has been very fierce. BYD called out the slogan of “lower electricity than oil” after the Spring Festival holiday, and intensively launched a number of “glory editions” models with cheaper prices, lowering the price to within 100,000 yuan, and adopting a price reduction and configuration increase strategy to further compress the price space of the A0-class market, which also made other auto companies unable to be calm, attracting many new energy and fuel vehicle brands to follow suit in price reductions. According to incomplete statistics, as of now, more than 15 auto companies in the domestic auto market have announced a reduction in the prices of their models. The adjusted models are mainly new energy pure electric and hybrid models, with prices ranging from 100,000 yuan to 200,000 yuan, and the maximum discount is close to 15%, reaching 30,000 yuan.
“Price for volume” is a means that auto companies have tried and tested to seize market share. It is worth mentioning that “price for volume” will also have a huge impact on the profits of auto companies. Taking Tesla as an example, in the past 2023, Tesla has cut prices in the US, Europe, China and other markets, which has enhanced the competitiveness of Tesla models in the auto market, but at the same time, it has also caused a decline in Tesla’s gross profit margin. Financial reports show that Tesla’s annual operating revenue in 2023 was $96.77 billion, a year-on-year increase of 19%; the annual net profit was $14.997 billion, a year-on-year increase of 19%; in 2023, Tesla’s gross profit margin was 18.2%, a decrease of 7.35% compared to 2022. Among them, affected by the price war, Tesla’s gross profit margin in the fourth quarter of 2023 declined to 17.6%, the lowest level since 2019.
In response to Tesla’s price increase, tonight, Lei Jun, chairman of Xiaomi Group, said: “Tesla is too great, I really admire it. In the current electric vehicle market, the competition is so fierce, only Tesla dares to raise prices.” At the same time, Lei Jun pointed out that many people are particularly concerned about the pricing of Xiaomi SU7. In terms of pricing, Xiaomi SU7 does have some pressure. I hope you all understand. But no matter what, we will definitely make you feel that it is worth the money.
