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As the aftermath of a year long "price war" lingers, Tesla once again sounds the horn of price reduction.
On January 12th, Tesla China officially announced a price reduction of 6500-15500 yuan for the Model 3/Y rear wheel drive and long range versions. The starting price of the Model 3 was lowered to 245900 yuan, and the starting price of the Model Y was lowered to 258900 yuan. The updated Model 3 and Model Y have achieved the lowest price in the history of the domestic market.
Specifically, the updated Model 3 offers more discounts, with a price reduction of 15500 yuan for the rear wheel drive version and 11500 yuan for the long range version, respectively; The Model Y rear wheel drive version and long endurance version have been reduced by 7500 yuan and 6500 yuan respectively, while the high-performance version has not undergone any price adjustments.
Tesla Official Weibo
Since 2023, Tesla has repeatedly adjusted the prices of its models. After the price reduction at the beginning of the year, Tesla's profits experienced a certain degree of decline. At the Q1 performance conference call, Tesla CEO Elon Musk stated that Tesla's business direction for 2023 is to quickly increase the scale of its automotive and energy businesses. Based on this goal, "zero profit sales of (cars) are possible in the future."
But with the continuous intensification of industry competition, simple price reductions can no longer bring enough market growth, and will also have a negative impact on the profitability of enterprises. Revitalizing products and upgrading technology are also key to seizing market share.
In September of the same year (2023), Tesla launched a new version of the Model 3. Although the new car has been improved in terms of exterior design, driving experience, cabin interaction, safety, etc., the starting price has increased by 28000 yuan compared to the old model, set at 259900 yuan.
However, the launch of the new model has not reversed Tesla's declining profitability. After a continuous decline in profits in the first three quarters, Tesla raised the prices of some of its models three times from October to November. Although the increase was not significant, it also attracted widespread attention from both inside and outside the industry. At that time, the reason for the price adjustment given by the salesperson was "increased sales, high production line pressure, leading to an increase in production costs.".
According to data released by the brand, Tesla delivered 484500 new cars globally in the fourth quarter of 2023, an increase of about 20% and 11% compared to the same period last month, setting a new historical high for Tesla's quarterly delivery volume. In 2023, Tesla delivered a total of 1.81 million new vehicles, a year-on-year increase of 38%, exceeding the annual delivery target of 1.8 million vehicles; Model 3 and Model Y are still the brand's main sales models, with a total delivery of 1.7397 million vehicles throughout the year.
According to third-party organizations, the order volume of Cybertruck has exceeded 2 million vehicles. From the perspective of delivery data, Tesla has submitted a perfect annual transcript in the fiercely competitive market landscape. However, facing the rapid rise of Chinese car companies, they still need to maintain a positive attitude in response.
By comparison, in the fourth quarter of last year, BYD's sales of pure electric vehicles reached 526400 units, higher than Tesla's delivery performance during the same period. In 2023, BYD's cumulative sales reached about 3.024 million vehicles, a year-on-year increase of 61.9%, exceeding the target of 3 million vehicles set at the beginning of the year; On the basis of firmly ranking first in China's new energy vehicle delivery rankings, it is also locking in the position of global new energy vehicle sales champion.
According to the latest data released by the China Association of Automobile Manufacturers, BYD's wholesale sales exceeded 340000 vehicles in December last year, while Tesla's wholesale sales in China were 94000 vehicles.
From the end of last year to the beginning of the year, Chery Star Journey Era ES, Extreme Krypton 007, Geely Galaxy E8 and other models have successively been launched, launching an impact on the segmented market where Model 3 is located. Industry insiders have stated that the updated Model 3 was previously priced high and faced numerous competitors. This price reduction may focus on enhancing the market competitiveness of the entry-level model.
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