AutoBeta(AutoBeta.net)04/30 Report--

On April 30, Tesla's official Weibo account said that the price of the Chinese-made Model 3 standard battery life upgrade would be reduced to less than 300,000 yuan, and the new price would be announced on its website on May 1.

It is worth mentioning that Tesla just made a wave of price increases a week before announcing the price cut. On April 24, Tesla's official website in China showed that the current domestic version of Tesla Model 3 standard battery life upgrade version and long-term battery life version after subsidies sold for 303,550 yuan and 344,050 yuan, up 4500 yuan and 5000 yuan respectively.

Tesla's price cut is also very simple, according to April 23 issued by the four ministries and commissions "on improving the promotion and application of new energy vehicles financial subsidy policy notice" pointed out that new energy passenger vehicles before subsidies must be sold at less than 300,000 yuan (including 300,000 yuan), that is, the starting price of more than 300,000 yuan of new energy vehicles will no longer enjoy subsidies, but support the replacement mode of new energy vehicles exception, the new policy will be July 22 formally implemented. Tesla said that lowering the price of Tesla Model 3 standard battery life version will allow more Chinese consumers to enjoy Tesla products with better cost performance, while also meeting the national new energy vehicle subsidy requirements.

It is worth noting that Tesla's price cut is only for the domestic Model 3 standard battery life version, excluding the long-life version and high-performance version. At present, Tesla's domestic Model 3 standard battery life version before the subsidy price is higher than 300,000 yuan, if the price does not reduce to less than 300,000 yuan, the domestic Model 3 will not be able to enjoy subsidies after July 22. If the starting price is less than $300,000 (assuming $299,000), the subsidized price is almost $279,000.

In fact, before Tesla's official announcement, rumors about the price reduction of the domestic Model 3 spread on the Internet, rumors that the domestic Model 3 will achieve the goal of price reduction through simple Autopilot, advanced sound system, advanced seats and other configurations. As for whether the domestic Model 3 configuration will remain unchanged after the price cut, Tesla has not yet made a statement.

There is no doubt that the price of domestic Model 3 dropped to 300,000 yuan has a great impact on the domestic new car-making forces. At this price, the competition pressure of electric vehicles with the original price of 200,000 - 400,000 yuan will be obviously increased. No matter it is NIO ES6, ideal ONE or Xiaopeng P7 which has just been listed, there will inevitably be strong competitive pressure. However, the new energy automobile market needs catfish like Tesla. The new domestic car-building forces can continuously improve their soft and hard strength under the impact of Tesla, which is a win-win result for customers and for the country.

At the same time Tesla announced the price adjustment, Tesla also released its first quarter 2020 results report. Tesla's total revenue in the first quarter of 2020 was $5.985 billion, up 32 percent from $4.541 billion a year earlier, according to the earnings report. Net profit attributable to shareholders of listed companies was $16 million, compared with a loss of $702 million a year earlier. It is understood that Tesla has made profits for three consecutive quarters in the first quarter of this year, with cash flow of-$895 million in the first quarter, an improvement from-$920 million in the same period last year.

In terms of sales volume, Tesla's first-quarter production and sales were 102,600 and 88,400 respectively, up 33% and 40.3% year-on-year. Among them, Model S and Model X produced about 15,300 units and delivered 12,200 units;Model 3 and Model Y produced about 87,200 units and delivered 76,200 units.

As Li Xiang, CEO of Ideal Car, said,"The threshold of 300,000 is estimated to be designed to limit Tesla, but it gives Tesla reason and necessity to cut prices." Today Li Xiang also forwarded Tesla's official announcement and said that "it is easy to predict the results, the most basic business common sense." It can be predicted that Tesla after price reduction will have more opportunities to enter the market segment, and the competitive pressure of domestic electric vehicles will still be more intense in the future.

At present, 30% of the parts of the domestic version of Model 3 have been localized. It is estimated that the localization rate of body parts will reach 80% in July 2020 and 100% by the end of 2020. This also means that as Tesla's supply chain gradually becomes localized, further price cuts are possible in the future. On the earnings call, Tesla CFO Zach Kirkhorn said there was still plenty of room to continue to reduce costs and would continue to cut prices.

We will continue to pay attention to Tesla's price reduction tomorrow. Tesla shares rose more than 4.08% to $800.51 after Tesla's official price cut and earnings announcement, and rose 8.72% to $870.30 after hours, giving Tesla a total market capitalization of $147.287 billion.

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