On May 5, Tesla China's official website announced that it would raise the price of the new Model S and the new Model X models by 1.90,000 yuan, an increase of 2.4%, and both models are expected to be delivered in the second quarter of this year。This is another price increase after raising the prices of Model 3 and Model Y three days ago.。

Specifically, according to Tesla's official website in China, the adjusted starting price of the Model S is 80.$890,000, Model X starts at 89.890,000 yuan。In addition, the Model S all-wheel drive version is also composed of 78.990,000 yuan adjusted to 80.890,000 yuan; Model S Plaid version by 100.990,000 yuan adjusted to 102.890,000 yuan; Model X all-wheel drive version from 87.990,000 yuan adjusted to 89.890,000 yuan; Model X Plaid version price from 103.990,000 yuan adjusted to 105.890,000 yuan。

It is reported that Model S and Model X are Tesla's first models to enter China, and are the only two Tesla models that have not yet achieved localization, compared to Model 3 and Model Y, Model S and Model X are positioned as millions of high-end luxury car market。

It is worth noting that as Tesla's high-end models, the sales of Model S and Model X are not high.。According to Tesla's previously disclosed data, Tesla delivered 131 for the whole of last year..390,000 vehicles, of which the Model S / X has only 6.670,000 vehicles。Therefore, Tesla's price increase may directly affect the second quarter sales of the Model S / X, which is already low in sales.。

 

What is the use of rising against the trend?？

 

In fact, the market is surprised, in fact, this year's new energy vehicles raw material lithium carbonate prices have fallen sharply, according to Shanghai Steel Union May 4 released data show that the average price of battery grade lithium carbonate reported 19.40,000 yuan / ton, from the previous high of 500,000-600,000 yuan / ton has fallen sharply.。Many car companies have actually begun to cut prices, and Tesla is doing the opposite。

In this regard, some institutions believe that Tesla's move is intended to convert orders。Among them, open source securities released a research report, Tesla this round of price increases or to cool the price war, is expected to stimulate demand to pick up。This round of price increases may, to some extent, stimulate potential consumers who are holding money to turn into real purchases.。

 

Musk "backstabbing"？

 

On April 19, local time, Tesla announced its first quarter 2023 results report, earnings data show that Tesla's first quarter revenue increased 24% year-on-year to 233.2.9 billion U.S. dollars, basically in line with market expectations of 233.$500 million; net profit 25.$1.3 billion, down 24% YoY, adjusted net profit 29.$3.1 billion, down 22% YoY; Adjusted EPS of 0.$85, down 21% year-over-year, the first EPS year-over-year decline since Q3 2019。

In the face of the overall decline in profit margins, Tesla CEO Elon Musk said in a post-earnings call, "We believe that driving higher production and larger fleets is the right choice, not lower sales and higher profit margins."。"

In short, despite the current decline in profit margins, but Musk said the follow-up will be determined to fight a "price war" to compete for market share.。

But just three days ago, on May 2, Tesla China just raised the price of all domestic models, up 2,000 yuan.。Meanwhile, according to Tesla's U.S. official website, the price of the Model Y long-range version rose to $50,240, up from $49,990; the price of the Model Y high-performance version rose to $54,240, up from $53,990; and the price of the Tesla Model 3 rose to $40,240, up from $39,990.。

For Musk's "rhetoric," most of the plans to buy Tesla "and so on party" said, such as the price of another wave of purchase, but this week's continuous price increases, no doubt to these people silly。

 

So will the price be reduced in the future?？

In fact, Tesla has been waging a price war around the world since last year。In the Chinese market, at the beginning of the year, Tesla made a significant price adjustment for the Model 3 and Model Y models, with a drop of 2 to 4.$80,000, Model 3 starts at 22.990,000 yuan, the largest price cut of the base version of the Model Y fell as much as 20%。

Moreover, this year Tesla has once again set off a new round of price cuts around the world.。In Denmark, Singapore, Germany, Hong Kong, China, the United States and other markets have been announced price cuts, including the U.S. market is a continuous release of price cuts news, involving models mainly Model 3 and Model Y.。

Tesla has previously said that its automotive business is expected to continue to reduce costs, in the current macro environment, the company will focus on rapid increase in production, pricing strategy more consideration of long-term profitability of bicycles, during the recession can sacrifice its industry-leading profit margins to achieve sales growth.。

In contrast, Tesla's biggest competitor, BYD, has seen its gross margin increase year by year.。In 2022, BYD's gross sales margin increased from 13.02% rapidly increased to 17.04%, and by the first quarter of this year, the company's gross margin further increased to 17.86%。It is not difficult to imagine that as the cost of lithium carbonate falls, BYD's profitability is likely to improve further。

So in the long run, Tesla previously said that the 20% gross margin red line is important, but in the short term, scale is more important to Tesla than profit.。In this regard, many Wall Street analysts believe that by the end of this year, Tesla's gross profit margin will inevitably fall below 20%。This means that Tesla is likely to continue to cut prices.。

Although the price increase has surprised many customers who intend to buy a car, in fact, after this round of price increases, the price of Tesla's models is still lower than the price at the beginning of this year.。