Image: Tesla Asia
Tesla may begin raising prices for Model Y in China, according to a local source. If this happens, it will be good news for investors as the company will increase its margins.
Throughout 2023, Tesla has been aggressively cutting the prices of its cars, starting with China. This made them very affordable, which attracted a large number of new customers who previously could not afford to buy Tesla cars. This strategy has paid off greatly. Despite the slowing economy and inflation, consumers continued to buy the company's products.
Even as Tesla continued to increase its share, lower car prices did not sit well with some investors. The price cuts have resulted in margins being squeezed. However, new reports from China suggest that Tesla's policy may soon change. According to reports from several local media outlets, the company may increase Model Y prices in October. According to the report, this information came from a local Tesla seller.
The company could end its scheme of offering 3,500 yuan ($480) referral incentives to Model Y buyers as early as this week. After that, it could start pushing prices higher, the report said. The increase could be as low as 8,000 to 10,000 yuan ($1,095 to $1,370), the source added. Since there is currently no evidence to support the information in the report, take it with a grain of salt.
Additionally, the source said the company may also decide to completely abandon the rear-wheel drive version of Model Y. This version was Tesla's best-selling model in China. It has all the new features the company added to the updated Model 3. The price of Model 3 will remain unchanged at 259,900 yuan, the source added.
An increase in vehicle sales prices could send investors a positive signal about margins and demand. This will mean that demand continues to grow and the company can improve margins.
© 2023, Eva Fox | Tesmanian. All rights reserved.
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Article edited by @SmokeyShorts; follow him on Twitter
About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
