After 4 days, Tesla announced another price increase.
On November 14th, Tesla announced an increase in the starting prices of the Model 3 and Model Y rear wheel drive models from now on. Among them, the price of the updated model 3 rear wheel drive has been increased by 1500 yuan, with a starting price of 261400 yuan after the adjustment; The price of the Model Y rear wheel drive version has increased by 2500 yuan, with an adjusted starting price of 266400 yuan.
Sina Weibo (@ Tesla)
This is Tesla's third official price adjustment in nearly 19 days. On November 9th, Tesla announced an increase in the price of the Model 3/Y Long Range Edition, with a 1500 yuan increase in the price of the Model 3 Long Range Renewal; The Model Y Long Range Edition has increased its price by 2500 yuan. Prior to this, on October 27th, Tesla announced that the domestic Model Y high-performance version had a price increase of 14000 yuan, with an adjusted price of 363900 yuan.
After this round of price adjustment, all models of Model 3 and Model Y have experienced price increases. Regarding the reason for the price increase, on November 14th, Tesla staff responded to an interview with the Daily Economic News reporter that this is mainly because Tesla's global market is in short supply, and (the company) has adjusted the model price based on basic market rules. If there are more buyers, the price will naturally increase, and if there are fewer buyers, the price will naturally decrease, "explained the Tesla staff mentioned above.
The reporter consulted Tesla's official website in China and found that the pick-up cycle for Model Y has been extended to 2-8 weeks, while the pick-up cycle for the new version of Model 3 is 2-9 weeks. However, a Tesla salesperson told reporters that if consumers have a car in their local Tesla delivery center, they can pick it up as soon as a week. But if the train departs from the Shanghai Super Factory, users will need to wait for 2-5 weeks. Ordering a car now is the most suitable time, and prices will continue to rise in the future, "said the Tesla salesperson mentioned above.
Tesla China official website
Regarding the explanation given by Tesla staff regarding the price increase, there is a view that if it is truly "in short supply", Tesla can temporarily suspend orders to alleviate delivery pressure, rather than selling at a higher price. Tesla's move is aimed at breaking the wait-and-see mentality of consumers holding coins for purchase through multiple price increases and stimulating booking owners to quickly switch to large orders.
Tesla CEO Musk has stated that the company will maintain its delivery target of 1.8 million vehicles in 2023. Official data shows that as of the end of September 2023, Tesla has delivered a total of 1.324 million new cars worldwide. Based on this calculation, Tesla's annual sales target completion rate is approximately 73.56%. Based on current data, Tesla needs to deliver at least 476000 new cars in the global market in the fourth quarter of this year to successfully meet its annual sales target.
In the Chinese market, Tesla is also facing a month on month decline in sales. The latest data released by the China Association of Automobile Manufacturers shows that in October this year, Tesla's Shanghai Super Factory delivered a total of 72100 new cars, a decrease of 2.6% compared to the previous month.
However, Yang Weibin, an analyst in the new energy vehicle industry, believes that Tesla's price increase for all models of the Model 3 and Model Y is more aimed at improving its low gross profit margin. At present, Tesla's gross profit margin is too low and its stock price fluctuates greatly. It needs to use this to increase its gross profit margin and boost investor confidence, "Yang Weibin told reporters.
Tesla's third quarter report shows that in the third quarter of this year, Tesla's revenue was approximately $23.4 billion, a year-on-year increase of 9%, lower than Wall Street's expected $24.3 billion, the slowest growth rate in three years; The net profit was 1.853 billion US dollars, a year-on-year decrease of 44%; The gross profit margin was 17.9%, a decrease of 0.3 percentage points from 18.2% in the second quarter, setting a new four-year low.
Musk has publicly stated that "Tesla is willing to lower the prices of electric vehicles again during turbulent times, although this will affect the company's gross profit margin, (we) are willing to sacrifice gross profit margin for sales growth
However, based on recent price increases, Tesla has not yet opened a price reduction channel. Recently, the automotive industry has been increasing salaries, and traditional American car companies have been raising employee salaries. Tesla will also raise salaries, and in addition, investment is needed in the development of new car models. This means Tesla can only ensure profits through price increases, "Yang Weibin analyzed.
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