Tesla Unexpectedly Hikes EV Prices Across The Globe After Several Rounds Of Price Cuts

On May 2, Tesla China's official website showed that the price of Tesla Model 3 and Model Y models increased by 2,000 yuan across the board. After the price increase, the price of Tesla Model 3 in China rose to 231,900 yuan, the high-performance version of Model 3 rose to 331,900 yuan; the price of Model Y in China rose to 263,900 yuan, and the long-range version of Model Y rose to 313,900 yuan, and the Model Y high-performance version rose to 363,900 yuan.

The price hike not only targets the Chinese market. In fact, Tesla’s US official website shows that on May 2, the price of the Tesla Model 3 rose to $40,240, up from $39,990 before. The price of the Model Y long-range version rose to $50,240 from $49,990 previously; the price of the Model Y high-performance version rose to $54,240 from $53,990 previously. In addition, in Canada, Japan and other markets, the prices of Tesla-related models have also been raised. Some industry insiders analyzed that Tesla’s move was to clear inventory and maintain sales, because the previous sharp price cuts aggravated consumers’ wait-and-see sentiment. Others believe that Tesla's price increase is to boost profits. On April 20, Tesla released its financial report. In the first quarter of 2023, the company's total revenue reached US$23.329 billion, a year-on-year increase of 24%. Among them, the total revenue of Tesla's automotive business reached 19.963 billion US dollars, an increase of 18% year-on-year. In the first quarter, Tesla produced a total of 440,800 new cars, a year-on-year increase of 44.33%; delivered a total of 422,900 new cars, a year-on-year increase of 36.39%. However, due to Tesla's several rounds of price cuts around the world this year, net profit has declined significantly: in the first quarter, Tesla's net profit was 2.513 billion US dollars, a year-on-year decrease of 24%. Among them, on January 6, the price of all China-made Tesla models was reduced, with a maximum drop of 48,000 yuan. The starting price of Model 3 was reduced to 229,900 yuan, and the starting price of Model Y was reduced to 259,900 yuan. hit a record low.　 According to foreign media reports, since the beginning of this year, the sales price of Tesla Model 3 in the United States has been reduced by 11%, and the price of Model Y has been reduced by about 20%. In the first quarter of this year, although Tesla’s production and sales both set records, its deliveries only increased by 4% from the previous quarter, which was far lower than the 17.8% growth in the fourth quarter of last year.　　

It is worth noting that after the release of the first quarter financial report, Tesla said that it expects the company's vehicle costs to continue to decrease, due to the increase in production efficiency of the new factory and the reduction in logistics costs, etc., and the company's product pricing will continue to be affected by multiple factors.