Why did Tesla raise prices twice in four days in China?

At the beginning of May, $Tesla (TSLA)$ Unexpectedly announced price increases consecutively. On the 2nd, Tesla China raised the prices of the Model Y and Model 3 by 2000 yuan; on the 5th, Tesla China increased the prices of all new Model S and all new Model X models by 19,000 yuan.

Not only did Tesla raise prices in the Chinese market, but it also raised prices of some models in the USA, Japan, Canada, and Germany markets.

Due to Tesla reducing prices in several global markets previously to stimulate demand, the prices of their models after this price increase are still lower than at the beginning of this year.

Some believe that although reducing prices has brought Tesla more sales, the continuously declining gross margin has approached a critical point. The automotive gross margin is close to the 20% red line, which may have also made Musk restless.

What is tesla's price increase all about?

Why did Tesla raise prices twice in four days in China?

正文：

Tesla's announcement of price increases in multiple global markets may be to improve its profitability and cash flow.

While reducing prices can stimulate demand, it may also weaken the company's profitability, especially when facing pressure from raw material costs and supply chain.

Furthermore, with the ongoing impact of the pandemic, the uncertainty in the global economic environment may also compel Tesla to increase the intensity of its price adjustments to address potential risks.

In addition, Tesla is continuously introducing new models and updating existing ones, which may require increasing prices to reflect these changes.

Overall, the specific reasons for Tesla's price increase may be multifaceted, including improving profitability, reflecting new models, and economic environment uncertainty.

However,, it is important to note that Tesla faces fierce market competition, and for consumers, price is one of the key factors determining whether to purchase a Tesla model.

Therefore, Tesla needs to find a balance between raising prices and maintaining market share.

In summary, we should take a more reasonable view of Tesla's short-term adjustments in car prices, including the short-term trend of stock prices. We should focus more on the long-term development of the enterprise. Great leading companies in the industry are worth our long-term investment.

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ZnWC : Nice review. I've written an article about Tesla's price. cutting. It's about increasing demand during a recession fear market and weeding out competitors with low or negative profit margin. Hence you observe that BYD started a price cut but not NIO which already had a negative profit margin. Another reason is price cutting may form backlash negative market sentiment and hurt share price in short term. It made sense that Tesla stated to increase price again - to prevent 'wait for further price cut' mentality to spread which is quite common during a recession. You'll also see the return of short rally. But what Tesla really worries is prolonged recession and trade protectionism which hurt business.

Quote:
Tesla's price cut is not a desperate Red ocean tactic used to combat decrease in EV demand . In fact Tesla is using Blue ocean + Price cut strategy. Tesla spent much effort to redesign it Gigafactory production to reduce its cost by 50%. There are also many new technology introduced during Tesla's Investor Day to highlight that its EV stand out among others...

https://www.moomoo.com/community/feed/110251968692230?data_ticket=212ca245a589f1e400fb2e247953bc77&futusource=nnq_search_search-result&content_type=feeddetail

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