On November 9th, according to Tesla's official website in China, both the Long Range versions of Model 3 and Model Y underwent price adjustments. The Model 3 Long Range facelift increased the price by 1500 yuan, with an adjusted starting price of 297400 yuan. The Long Range version of Model Y increased by 2500 yuan, with an adjusted starting price of 302400 yuan.
Some analysts believe that Tesla's price increase is due to the continuous extension of delivery cycles, resulting in a shortage of cars. According to Tesla China's official website, the overall pickup cycle for Model Y has been extended to 2-8 weeks, while the overall pickup cycle for the updated Model 3 is 2-9 weeks.
Under the situation of "supply exceeding demand", Tesla's reverse price increase
At the beginning of the year, while other new energy vehicle companies were raising prices, Tesla chose to significantly lower prices. Nowadays, the wave of price cuts has swept through the entire automotive industry, but Tesla has chosen to increase prices.
On November 9th, the Tesla Model 3 and Model Y Long Range versions increased their prices one after another, with the former increasing by 1500 yuan and the latter increasing by 2500 yuan. Prior to this, on October 27th, the Model Y high-performance version had just undergone a price increase of 14000 yuan. This means that Tesla has already raised prices twice in two weeks.
On November 6th, a Tesla salesperson told reporters: "The Model Y (Long Range Edition) is also about to increase in price, which is a continuing adjustment after the price increase of 14000 yuan for the high-performance version." Previously, Tesla's price adjustments were "sudden," but this time there was a price adjustment forecast. Some netizens believe that Tesla may be using price increases to encourage users to place orders quickly and boost year-end sales.
Why does Tesla continue to raise prices? Some analysts believe that prices are mainly determined by supply and demand. Tesla's Shanghai Super Factory is currently facing a situation of "oversupply" in production capacity. The cars produced by the factory continue to be supplied to many countries in Asia Pacific and Europe, and have already secured the top sales figures in multiple markets in advance. It is not ruled out that the delivery cycle may continue to be extended in the future.
According to Tesla China's official website, the delivery cycle of the Tesla Model 3 Long Range Renewal has been increased to 6-9 weeks, and the Model Y Long Range Edition has been increased to 6-8 weeks. The 'supply shortage' of cars has provided some confidence for Tesla's current price increase.
And this' supply shortage 'still occurs against the backdrop of Tesla's Shanghai super factory's continuous increase in production capacity. According to Tesla data, the production capacity of Shanghai's super factory in the second quarter of this year was 750000 vehicles per year, and it has increased to 950000 vehicles per year in the third quarter of this year. At present, the updated version of Model 3 produced by Tesla's Shanghai Super Factory has been delivered in markets in Europe, Asia Pacific, and other regions, with corresponding upgrades in cockpit, performance, intelligence, safety, and other aspects.
According to data released by the China Association of Automobile Manufacturers, Tesla's Shanghai Super Factory delivered over 72000 vehicles in October, with a cumulative delivery volume of approximately 771000 vehicles from January to October, surpassing the full year of 2022. From a segmented perspective, Model 3 delivered approximately 25000 units in October this year, becoming the top seller of luxury brand sedans. Model Y delivered over 47000 units in October, becoming the sales champion of pure electric vehicles.
Tesla's performance is under pressure, and its gross profit margin has been surpassed by BYD
In the first three quarters, all Tesla models have undergone price reductions, which has also put pressure on Tesla's profits. According to Tesla's financial report, the company's total revenue in the third quarter was approximately $23.4 billion (approximately RMB 171.2 billion), a year-on-year increase of 9%, and net profit was approximately $1.9 billion (approximately RMB 13.9 billion), a year-on-year decrease of 44%.
From the perspective of gross profit margin, Tesla's total gross profit margin in the third quarter was 17.9%, which failed to meet market expectations. According to the research report of Galaxy Securities, BYD's quarterly gross profit margin in the third quarter was 22.12%, an increase of 3.16 percentage points year-on-year. This means that Tesla's gross profit margin has been surpassed by BYD.
Tesla stated that in the future, it can respond to the adverse impact of price declines by reducing costs. In the third quarter, the company's single car sales cost decreased to $37500 (approximately 273200 yuan). With the continuous upgrading of new factories, unit costs are expected to continue to decline.
Although overall Tesla's car manufacturing costs are continuously decreasing, the launch of new products has increased both in quantity and price, which has to some extent raised Tesla's costs. It is understood that the new Model 3 is equipped with a 15.4-inch high-resolution central touch screen in the front row, which has higher brightness and includes functions such as video playback, gaming, route navigation, and vehicle control. An 8-inch control screen has been added in the rear row, which can control seat heating, adjust air conditioning volume, play music and videos. The windows are equipped with soundproof glass, greatly improving soundproofing performance. The Model Y has also been upgraded, with a 100 km/h acceleration of 5.9 seconds for the rear wheel drive version (previously 6.9 seconds), as well as upgraded seats and added ambient lights.
Previously, Tesla CEO Musk had stated that the current US loan interest rates continue to rise, and Model 3 and Model Y are becoming unaffordable to users. Tesla needs to continue lowering prices to reduce monthly repayment pressure on users, so that more people can afford them.
For Tesla and all new energy vehicle companies, 'profit or sales' has always been a choice question. The price increase of the Model 3 and Model Y Long Range Edition this time may indicate that Tesla has chosen profit in the short term. However, in the long run, continuing to reduce car manufacturing costs and lower car prices remains Tesla's pricing trend.
The automotive industry has launched a "year-end price war"
Although Tesla has chosen to increase prices, it is still difficult to reverse the overall trend of price reduction in the automotive industry. According to reporter statistics, since November, multiple brands such as BYD, Zero Run, and Euler have been offering price reductions and promotions.
On November 1st, the official Weibo account of "BYD Motors" announced that it will launch the "Million Seas Gratitude and Gift" campaign from November 1st to November 30th, offering discounts for five car models. Among them, the frigate 07 has a 2000 yuan promotion to 20000 yuan, the Dolphin and Seal Champion Edition has 2000 yuan promotion to 9000 yuan, and the Song PLUS Champion Edition and destroyer 05 Champion Edition have 2000 yuan promotion to 7000 yuan.
On the same day, Geely's LinkedIn brand also launched its November car purchase benefits: if you complete the LinkedIn 08 lock order before November 30th and collect the car before December 31st, you can enjoy a purchase subsidy of 6000 yuan, a free upgrade of Harman Katon 23 speaker sound system worth 10000 yuan, a free five-year NOA function worth 7500 yuan, and a maximum renewal subsidy of 6000 yuan.
On November 2nd, Zero Run announced discounts for all models, with a maximum financial discount of 10000 yuan. From November 1st to November 30th, consumers who place orders for the entire series of models such as the Zero Run T03, C01, and C11 can enjoy financial discounts and optional fund subsidies, up to 10000 yuan.
The Euler brand has announced that users who order the Euler Lightning Cat before November 30th can enjoy a limited time cash discount of 30000 yuan. They can choose the Lightning Cat Night Edition set, and the optional price can be reduced by 50%. After the discount, the starting price of the Euler Flash Cat has decreased to around 150000 yuan, while the price of the night version ranges from 176300 to 241300 yuan.
Huatai Securities Research Report believes that the automobile price war in 2024 is expected to slow down. Structurally, the new car models in 2024 are concentrated at 150000 to 300000 yuan. In terms of price, the profit margin of joint venture fuel vehicle brands has been compressed, and there is no basis for a significant price reduction. The subsequent price reduction space for cars mainly comes from upstream cost transfer. Continuing to lower the price of lithium carbonate in 2024 may lead to a decrease of about 5000 yuan in batteries. The price reduction space is limited, and the price war is expected to slow down.
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