By
Svetlana Soroka
April 18th, 2024
Following months of repeated price cuts, Tesla has raised the price of some of its EV offerings in China to remain competitive.
Tesla (NASDAQ: TSLA) has hiked the price of its new Model S and Model X electric vehicles in China by 19,000 yuan ($2,751). On Friday, the company’s website reflected the product price increase, which comes on the heels of price hikes for its other cars.
Tesla Models S and X EVs to Sell for 808,900 Yuan and 898,900 Yuan in China
As it stands, Tesla’s Model S costs 808,900 yuan compared to its previous price of 789,900 yuan. In addition, the company’s Model S Plaid variation also commands a steeper purchase price of 1,028,900 yuan compared to 1,009,900 before. Furthermore, Tesla’s Model X sports utility vehicle now sports a price tag of 898,900 yuan versus its previous retail price of 879,900 yuan.
Earlier in the week, Tesla also hiked the price of its Model 3 and Y EVs in China and other markets, including the United States. The renewable energy-oriented multinational automotive company’s price hikes come after its sustained price cuts. Over the last few months, Tesla slashed the prices of its popular EVs to induce more demand amid an increasingly competitive space.
Tesla reduced the price of its Model 3 sedan and Model Y sports utility vehicles in the fourth quarter of last year, continuing to do so past Q1 2023. After recording a meager delivery count late last year, the company saw the need for price reductions.
Musk on Tesla’s Growth Outlook
At Tesla’s Q1 2023 earnings call, chief executive officer Elon Musk said the company will target higher sales volumes than higher margins. However, Musk also added that he expects his EV company to “generate significant profit through autonomy” over time. As the outspoken business executive put it at the time:
“We’ve taken the view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margin. However, we expect our vehicles, over time, will be able to generate significant profit through autonomy.”
Furthermore, Musk also explained to investors:
“We do believe we’re laying the groundwork here, and then it’s better to ship a large number of cars at a lower margin and subsequently harvest that margin in the future as we perfect autonomy. This is an extremely important point.”
The Tesla chief pointed out that the Model Y became Europe’s best-selling vehicle of any kind in the first quarter. He also revealed that the fully electric mid-size SUV was the best-selling non-pickup vehicle in the US during the same period. Musk noted that these accomplishments came despite production and delivery headwinds and commended the team. The CEO concluded his address by stating that Tesla sought to keep making and selling as many cars as possible despite unfavorable macroeconomic parameters. Stressing that it’s now a good time for the company to strengthen its dominance in the EV industry, Musk added he would remain growth-oriented.
For the first quarter of 2023, Tesla delivered 422,875 vehicles, surpassing its previous record of 405,278 in Q4 2022.