AutoBeta(AutoBeta.net)08/14 Report--

Another car company official announced a price reduction, this time finally waited until Tesla.

Tesla officially announced that the price of Model Y long-lasting version and high-performance version has been reduced by 14000 yuan, the starting price of Model Y long-lasting version has been adjusted from 313900 yuan to 299900 yuan, the price of Model Y high-performance version has been adjusted from 363900 yuan to 349900 yuan, and the price of Model Y rear wheel drive version has not been adjusted yet.

There is also a discount in addition to Model YMagneModel3. Tesla Model 3 launched 8000 yuan limited time insurance subsidy for existing cars, ordered and delivered the Model 3 rear wheel drive version from August 14, 2023 to March 9, 2023, and completed delivery, and purchased insurance subsidies through cooperative insurance institutions to buy corresponding car insurance, can enjoy a subsidy of 8000 yuan.

In fact, Tesla's price reduction had been expected for a long time. During the second-quarter earnings call, Tesla CEO Musk said that Tesla would have to lower pricing if the macro environment was volatile, and stressed again that "I think it makes sense to sacrifice profit margins to produce more cars." Earlier, Musk even said bluntly that Tesla could sell his products at "zero profit".

On July 20, Tesla released his financial results for the second quarter of 2023. According to the financial report, Tesla's total revenue in the second quarter was 24.927 billion US dollars, an increase of 47.2 percent over the same period last year. Of these, the United States is still Tesla's largest market in the world, with revenue of 11.332 billion US dollars in the second quarter, up 17.87 per cent from the same period last year. Revenue in the Chinese market was $5.731 billion, up 51.33 per cent from a year earlier.

In terms of sales volume, Tesla delivered a total of 466000 electric vehicles in the second quarter, the highest quarterly delivery since the founding of Tesla, of which Tesla delivered 157000 new cars in China. In the first half of 2023, Tesla delivered a total of 889000 vehicles worldwide, an increase of 57.4 percent over the same period last year, of which 294000 were delivered in the Chinese market.

Tesla's share of the Chinese market has risen compared with 2022. On the one hand, the Chinese auto market was affected by the epidemic in the second quarter of 2022, with a strong low base effect. On the other hand, Model 3 failed to change in time, Model Y has become the main source of sales, price reduction is still the main means to enhance Tesla's competitiveness.

Since the beginning of this year, Tesla has announced price cuts in many markets around the world. This strategy is obviously effective. The decline in sales prices has brought considerable market performance for Tesla, but it has also made Tesla less and less profitable. Tesla's gross profit margin in the second quarter was only 18.2%, the lowest level in 16 quarters. Of course, as Musk said, Tesla is more willing to guarantee market share than whether to make money.

From the performance of the terminal market, Tesla continues to maintain a high market heat, but the pressure is still great. Tesla's retail sales in China were halved month-on-month in July, with 31423 vehicles, including 23632 for Model Y and 7791 for Model 3, according to the Federation of passengers.

A new round of price cuts has begun. Who will be the next car company to cut prices? According to incomplete statistics in the Tramway report, since August, more than 10 car companies have launched "price reduction and promotion" policies, including official reductions, time-limited promotions, time-limited subsidies, new models with lower configurations, and so on, mainly new energy vehicles.

On Aug. 14, the price of Naxi car was adjusted for the 2022 NasiS partial pure electric models, with a price reduction range of RMB2.6-49000 and a price range of RMB15.98-233800 after the price adjustment. In addition, the official also provides 8000 yuan of financial discount or replacement subsidy.

In the first half of the year, almost all car brands failed to meet half of their annual sales targets, highlighting market pressure. Since the beginning of the third quarter, many car companies have announced price cuts for their products. On the one hand, it is the completion of the guidelines for sales targets. July and August are the off-season for traditional sales, and a large number of car companies choose to launch discount activities at this time. Start the "Golden Nine Silver Ten" sales season ahead of time, offset the sales pressure to some extent, on the other hand, enhance the competitiveness of products, under the background of more and more brands reducing prices. Failure to follow the price cut may lead to the loss of their own market, which may also be the reason why more and more car companies are choosing big promotions.

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