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Tesla China announced on April 1 that the price of domestic Model Y will be increased by 5000 yuan, the latest price of Model Y is 263900 yuan, the long-lasting version of Model Y is 304900 yuan, and the high-performance version of Model Y is 368900 yuan. It is worth mentioning that the previous car insurance subsidy policy of 8000 yuan and the car paint reduction policy of up to 10000 yuan will also expire on March 31. According to this calculation, including insurance subsidies, the actual price increase of Model Y is as high as 23000 yuan.

While other car companies cut prices, Tesla did the opposite. Many netizens said they "don't understand". According to the Tramway report, the move may be a disguised measure to force orders, intended to boost sales at the end of the quarter. Tesla Model 3 and Model Y are both delivered in 2 to 6 weeks.

After entering 2024, the price war in the domestic car market is becoming more and more fierce. Chinese new energy manufacturers have carried out large-scale price reduction sales of their electric models in order to further seize market share. BYD, for example, launched the Qin PLUS honor version and destroyer 05 model after the Spring Festival of the year of the Dragon, with a starting price reduced to 79800 yuan and chanting the slogan "electricity is lower than oil". Since then, not only independent brands, including SAIC GM Wuling, Guangzhou Automobile Honda, SAIC GM and other manufacturers have also joined the price competition to launch lower-priced entry-level models to cope with market competition.

Tesla also wants to raise prices in the face of fierce competition in the domestic car market, which has something to do with its profit performance under pressure. In 2023, Tesla delivered 1.8086 million cars worldwide, "stepping on the line" to achieve the delivery target of 1.8 million. However, behind Tesla's successful completion of the 2023 sales target, it is inseparable from the sacrifice of profit for price for volume. During the reporting period, Tesla's annual revenue was US $96.773 billion, an increase of 18.79% over the same period last year; net profit belonging to common shareholders was US $14.997 billion, an increase of 19% over the same period last year; although both revenue and profit increased, gross profit margin fell from 19.3% in the first quarter to 17.6% in the fourth quarter. Goldman Sachs analysts have said that the main unfavorable factors facing Tesla include a larger-than-expected drop in car prices, increased competition in electric vehicles, delays in products and functions such as FSD and the third-generation platform, and so on. Although Tesla has long-term growth potential, he faces major risks in the short term.

There is no doubt that at present, Tesla's product competitiveness has been obviously insufficient, and Tesla's model upgrading speed is too slow. Generally speaking, a fuel vehicle will be revamped in about three years and replaced in about six years, while in the electric era, the frequency of electric cars is higher, and the retrofit of domestic electric cars will be shortened to two years and four years. Tesla, on the other hand, released Model 3 in 2016 and did not launch a change until 2023.

In the past, many Chinese electric cars would regard Tesla as a competitor or even a model, and surpassing Tesla became their primary goal. From the current market performance, although the market performance of most electric vehicles is not as good as that of Tesla, it has indeed surpassed from the perspective of core technology. The reason why consumers are willing to choose Tesla is still based on brand awareness considerations. First of all, Tesla is a foreign brand, secondly, he has been developing in the electric vehicle market for a long time, and finally he has mastered the core technology, but Tesla is also slowly being abandoned. On March 28th, Xiaomi SU7 officially announced its listing, its direct competitor is Model 3, 215800 yuan lower than the Model 3 starting price of 30, 000 yuan, larger size, cooler shape, more technological sense, listed 24 hours after 88898 orders, more people choose Xiaomi SU7, which means that Model 3 users will be greatly lost, and even affect Model Y.

Tesla's domestic retail sales in February were 30100, down 11 per cent from a year earlier, and deliveries totaled 70000 in the first two months of this year, up 15 per cent from a year earlier, according to the Federation. Consumers have a heavy wait-and-see mood on prices, and the positive incremental factors are not obvious in the short term. At that time, there will be a temporary downturn in sales and wait-and-see phenomenon, and the positive purchase effect brought about by the price reduction in the short term will be offset, but under the trend of a fierce price war in China's car circle, can Tesla keep himself against the trend?

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