AutoBeta(AutoBeta.net)03/03 Report--

Tesla will raise the price of two of its models by at least $1000 today, according to Tesla's U.S. website, including the Model Y rear-wheel drive and long-range all-wheel drive models, which will take effect March 1. In addition, the official website also shows that between now and February 29, the price for the Model Y rear-wheel drive version and the long-range version will be lowered by $1000, respectively, to $42990 for the Model Y rear-wheel drive version and $47990 for the Model Y long-range version.

In fact, this is not the first time Tesla has raised the price of its models this year. On Feb.4, Tesla's U.S. market adjusted the price of its Model 3 long-range model by $1000 to $46990. There has been no news of price increases in the Chinese market.

It is worth noting that some Tesla models in the U.S. market have risen in price or have some correlation with Tesla profit decline, cost pricing and incentive purchases. Tesla's full-year revenue of $96.77 billion in 2023 included revenue of $25.17 billion in the fourth quarter, down from analysts 'estimates of $25.87 billion, according to Tesla's latest earnings report for last year. Tesla's gross margin was 17.6 per cent in the fourth quarter of last year, below market expectations of 18.3 per cent, the lowest level since 2019 and 6.12 percentage points lower than a year earlier. Tesla's decline in gross profit margin last year has something to do with the big price cuts opened in several regions last year. Tesla's price increase may be due to profit pressure, eager to restore gross margin.

In addition, Tesla adopts the direct sales model, and the vehicle price adjustment directly reflects the actual situation of cost fluctuation, so it is expected that the price increase of Tesla vehicles may be related to the tight supply of raw materials in the current market and the rising price of raw materials for power batteries.

In contrast, Tesla China made massive price cuts on the Model 3 and Model Y earlier this year. Among them, the Model 3 new version dropped 15500 yuan, and the adjusted price was 245,900 yuan; the Model 3 long-life version was lowered by 11500 yuan, and the latest price was 299,900 yuan; the price of Tesla Model Y rear-wheel drive version was lowered by 7500 yuan, and the adjusted guidance price was 258,900 yuan; the price of Tesla Model Y long-life version was lowered by 6500 yuan, and the adjusted guidance price was 299,900 yuan; On Feb.7, Tesla once again launched New Year's exclusive benefits for the Chinese market, including free overcharge transfer, 30-day access to EAP for millions of owners and limited-time upgrades to cold weather packages.

Of course, Tesla's strategy in the Chinese market is inseparable from the current intensification of domestic competition. With the rapid development of domestic electric vehicles, Tesla is no longer the only choice for consumers. For example, BYD has a certain market share in the market below 200,000 yuan. In the market of 300,000 - 500,000 yuan, there are competitors such as Krypton, Weilai, Ideal and Lantu. Tesla will also face certain challenges if it wants to gain market share. Tesla's price cuts in the Chinese market at the beginning of the year are undoubtedly hoping to sacrifice profits for sales, thus achieving more aggressive goals. However, at present, many domestic automobile enterprises also started the price war, Tesla's price-for-quantity way can get sales promotion, this still needs time to verify.

As for whether Tesla China will follow up on price increases, the auto industry is concerned that there is a certain possibility, after all, Tesla often does not play according to common sense, vehicle prices rise and fall is also normal. In response to Tesla's price increase in the US market, some netizens pointed out that Tesla's price increase is creating tension and allowing consumers to place orders and pick up cars as soon as possible. However, some industry insiders said that Model Y price increase or in order to enhance the attractiveness of Model 3 and promote its sales, after all, Model Y and Model 3 use different production lines, Model 3 insufficient demand will cause waste of production capacity.

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