The price "repeatedly jumped" Tesla's Chinese models were reduced by more than 10,000 yuan

Reporter Yang Rangchen and Quartz Jing report from Shanghai

(Tesla officially announced that the prices of all models, including the Model Y, will be reduced by 14,000 yuan on April 21.) Newspaper Reference Room/Photo)

Affected by the decline in personnel costs, Tesla officially announced a price cut after 20 days of price increases in the Chinese market.

"It's already bottomed out! Now at this price, how can other brands be sold!" A sales consultant at a Tesla store in Minhang District, Shanghai, told China Business News on April 21 that with Tesla's current price reduction of 14,000 yuan for all models in the Chinese market, the best time to buy Tesla has arrived.

As for the reason for the price reduction, the sales consultant said that it was because of the expected impact of the reduction in personnel costs. However, the salesperson also further said that Tesla's real cost has not been reduced, and "it is more advantageous to buy now".

Relevant information shows that on April 15 this year, Tesla issued an internal letter saying that it would lay off 10% of its employees worldwide, with more than 10,000 layoffs. Several departments in China have been affected, and the sales department may be the hardest hit by the layoffs.

The data also shows that the current Tesla Model Y has dropped to 249,900 yuan, and the Model 3 has dropped to 231,900 yuan. A sales consultant at a Tesla store in Shanghai's Xuhui District told reporters that the price adjustment was a "global price correction".

The reporter noticed that the price cut was only 20 days after the last Tesla price increase. On April 1 this year, Tesla raised the price of all its Model Y products in the Chinese market. At that time, the price of the Model Y was raised to 263,900 yuan, the price of the Model Y long-range version was raised to 304,900 yuan, and the price of the Model Y high-performance version was raised to 368,900 yuan, all of which increased by 5,000 yuan.

Price reductions in multiple markets around the world

In fact, Tesla's price cut involves multiple regional markets around the world.

In addition to the price reduction, the Model Y and Model 3 have been adjusted in terms of preferential policies for interest-free loans.

"The interest-free loan for the Model 3 has not been retained after this price adjustment, and the new price and interest-free loan can only be selected, while the Model Y has multiple advantages such as interest-free loans, new prices, and the current car under the stars. Tesla's sales consultant further said that the multiple benefits of Model Y are also limited in quantity, and the loan interest rate of Model Y will be restored when the starry sky is gone.

The reporter noted that the Chinese market is not the first market for Tesla to reduce the price of its products, and on April 20, Tesla has lowered the price of some of its models in the US market by $2,000, which involves all Model Y products and some models of Model S and Model X.

In addition to reducing the price of products, Tesla is also adjusting the price of functions such as autonomous driving in the U.S. market. On April 21, Tesla's official website in the United States showed that Tesla lowered the price of FSD (Full-Self Driving, Tesla's self-driving system) by $4,000, from $12,000 to $8,000.

As early as the end of October to the end of November 2023, Tesla began to increase prices continuously. At that time, Tesla raised the prices of many products of the domestically produced Model 3 and Model Y four times in different ranges. Coupled with the price increase of the Model Y on April 1 this year, Tesla has raised the price in the Chinese market five times in half a year.

But in comparison, Tesla's recent sales performance has been poor. According to Tesla's official data, in the first quarter of 2024, Tesla produced a total of more than 433,000 vehicles, but only 386,800 were delivered worldwide, down 8.53% from the same period last year and 20.1% from the previous quarter. This is the first time in five quarters that Tesla has seen a quarterly sales decline.

Tesla's performance in the Chinese market has also declined. According to the data of the Passenger Association, in the first quarter of this year, Tesla's retail sales in China reached about 132,400 units, down 3.6% from the same period last year, ranking third among new energy manufacturers, behind BYD and Geely Automobile, with a market share of about 7.5%.

In China, they may face challenges

As the automotive market changes, Tesla may face a series of tests.

On April 20, a Tesla Chinese owner asked Musk on the X platform about when Tesla's FSD function, 3D modeling images and reversing assistance and other functions will be pushed to China's HW3.0 system owners. Musk replied: "It could happen soon." ”

The reporter noticed that since the second half of 2023, news of Tesla's promotion of its FSD into the Chinese market has begun to appear frequently. According to Tesla's official website in China, as of April 21, Tesla's enhanced version of self-driving costs 32,000 yuan, while full self-driving costs 64,000 yuan.

Industry insiders have different views on Tesla's FSD entry into the Chinese market. In the view of Jiang Han, a senior researcher at Pangu Think Tank, FSD, as Tesla's autonomous driving technology, will greatly enhance the competitiveness and attractiveness of Tesla's products if it can be widely used in the domestic market.

Jiang Han also told reporters that the competition in China's new energy vehicle market is becoming increasingly fierce, and domestic car companies have made significant progress in autonomous driving and intelligence, which has posed a certain competitive pressure on Tesla. "Tesla needs to take a hard look at its own shortcomings and adjust its strategy in a timely manner to adapt to changes in the market. ”

Zhang Xiang, a visiting professor at the Yellow River Institute of Science and Technology, told reporters that Chinese car companies are launching new models faster and faster, and the cycle of updating models is getting shorter and shorter, compared to Tesla's market performance in China. "At present, the self-driving technology is not mature, and if Tesla uses the self-driving technology as a marketing tool, it will not be able to really increase the sales of its products. ”

However, the current price war in the domestic auto market is still fierce, and it remains to be seen whether car companies' price cuts can boost sales growth.

Jin Jun, PwC China Automotive Industry Leader, previously said that in the context of strong supply and weak demand in China's automotive industry, overcapacity in core areas represented by vehicle manufacturing and power batteries is becoming more and more obvious. "The increasingly fierce competition has led to the dual challenges of volume and price in the automotive industry. ”

The Passenger Association also believes that due to the continuous series of model price reduction events that began after the Spring Festival in February this year and the new energy models launched from 2022 have entered the stage of product remodeling and upgrading, this expectation has aggravated the wait-and-see mentality, and consumers hope to wait for the car market to stabilize before buying a car.

However, the passenger association said that with the recent launch of Xiaomi cars and the further adjustment of the prices of a new round of related models, and April is a period of intensive release of new models, the market's consumer enthusiasm will be gradually stimulated.

(Editor: Quartz Jing Review: Tong Haihua Proofreader: Yan Jingning)