Rising 23,000 against the market? Tesla broke the law of "cost pricing".

(Text/Zhang Jiadong Editor/Zhang Guangkai)

In the face of the "price war" led by BYD after the Lunar New Year this year, Tesla once again stood up and became the "first person" to increase prices against the trend just as many auto companies chose to follow up quickly.

However, unlike the previous "surprise" price increases, this time Tesla chose the form of "teaser" to inform users of the price adjustment plan.

A few days ago, the Financial Associated Press said that it was learned from Tesla China that the price of Model Y products will be officially increased on April 1, and the price will be increased by 5,000 yuan, and at the same time, the current 8,000 yuan official car maintenance subsidy and up to 10,000 yuan of car paint reduction and exemption policy will also expire on March 31. After the superimposed calculation, the actual increase of the Model Y this time will reach up to 23,000 yuan.

It is worth mentioning that compared with the increase of 2,000 yuan in February last year and Tesla's price adjustment in the past few years, the price adjustment of Model Y this time is particularly drastic. And in the form of a teaser, it seems that Tesla's official delineation of the final window period for users.

More importantly, behind this price adjustment, Tesla's law of "pricing at cost" is being broken.

In this price reduction notice, Tesla claimed that the North American and European markets had officially announced that the price would be increased by $1,000 and €2,000 respectively in the two places, and the reason for the price increase in overseas markets given by Musk was: The price increase belongs to Tesla's "seasonal" policy, because the consumer demand for electric vehicles in winter is low, and Model Y has previously reduced prices, and the price increase is a callback.

But in the Chinese market, Tao Lin, Tesla's vice president of external affairs, once said that behind Tesla's price adjustment, there is essentially a unique cost control law. Pricing at cost has also become a unified caliber for Tesla's many price adjustments in China.

However, compared with the "seasonal" policy in the European and American markets, the sharp price increase of the Model Y this time obviously lacks a substantial "cost control" reason.

From the perspective of raw materials, the price of battery cells, which accounts for the vast majority of the cost of pure electric vehicles, has fallen to the bottom this year, even if Tesla's two welfare policies launched on March 1 are all withdrawn, its additional 5,000 yuan cash price increase cannot explain the correlation with the cost of the whole vehicle.

Looking back at this price increase, the fundamental reason why Tesla did not hesitate to give up the strategy of "cost price adjustment" and also significantly increase the price of hot-selling models was actually the decline in Tesla's gross profit margin last year.

The price war in the car market for two consecutive years has caused Tesla's interests in the market to decline significantly.

According to Tesla's 2023 financial report, Tesla's annual revenue last year was $96.77 billion, a year-on-year increase of 19%, but it slowed down significantly from the high-speed growth of more than 50% in the previous two years, and at the same time, Tesla's gross profit margin also fell from a peak of 32.9% in the first quarter of 2022 to 18.2% in the whole of last year.

Obviously, the practice of "sacrificing profits for sales" mentioned by Musk in July last year has kept Tesla's position as the world's No. 1 electric vehicle sales, but it has also caused Tesla's business conditions to suffer quickly. What's more, after Musk said that he would trade price cuts for sales, investors once expressed their disappointment with his approach.

For Tesla, price cuts will not keep the trust of investors, and it will not be able to cope with more competition in the market if it does not cut prices. Therefore, since the beginning of this year, Tesla has chosen to ban direct price reductions with various time-limited comprehensive preferential policies, but in the increasingly fierce new energy price war in the Chinese market, Tesla's sales have not shown much improvement.

According to the data of the Passenger Association, Tesla's wholesale sales in China in February were 60,400 units, down 18.9% year-on-year and 15.5% month-on-month. Even though Tesla has previously warned investors that sales growth in 2024 may be significantly lower than in 2023, such a sluggish market is obviously not in line with Tesla's expectations for full-year sales growth.

From the point of view of time, the price increase from April 1 may be Tesla's hope to promote consumers to trade and boost sales in March by "lowering expectations".

In this regard, Lei Jun, chairman of Xiaomi Group, posted on Weibo: "Tesla is too good, I really admire: the current electric vehicle market, the competition is so fierce, only Tesla dares to raise prices." At the same time, Lei Jun also pointed out the problem of insufficient configuration of Tesla products in the market with the upcoming Xiaomi SU7.

On the one hand, competitors are eyeing Tesla's existing market, and on the other hand, Tesla needs to measure the balance between profit and market acceptance between price adjustments. Obviously, in the context of the rapid decline in global demand for electric vehicles, Tesla, whose sales have been increasing year after year, are just beginning to come under pressure.

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