Wealth,  Tech

Tesla’s price cut sparked heated debate

  Recently, Tesla China announced on its official website that the prices of the Model 3 and Model Y domestically produced models on sale will be adjusted. The price cuts for the remaining versions of the new model ranged from 20,000 to 48,000 yuan, setting a record low in Tesla’s China price. As soon as the news came out, it immediately sparked heated discussions among Tesla owners and prospective owners.
  Tesla took the lead in firing the first shot in the electric vehicle price war at the beginning of 2023. Will it cause “waves” in the new energy vehicle industry?
Model 3/Y price adjustment again caused dissatisfaction

  ”The new car has only been driven for more than 50 kilometers, and the price has been reduced by tens of thousands of yuan before it is warmed up. It is really dumbfounding.” Tesla owner Mr. Gao complained. After the news of Tesla’s price reduction came out, many Tesla owners formed a “rights protection group” and gathered in Tesla experience stores in Chengdu, Changsha and other places, demanding that Tesla compensate the owners who recently bought cars , Related videos and pictures aroused widespread concern on the Internet.

  Ms. Li, a car owner who posted rights protection information on social media, said that she has been paying attention to Tesla’s price. More than 30,000 yuan.” This is Tesla’s second major price cut in the past two months. On October 24, 2022, Tesla’s official website showed that the price of all Model Y and Model 3 models sold in China will be adjusted, with a price cut of more than 10,000 yuan.
  The sudden and sharp price cuts have even seen the phenomenon of “upside-down” prices of Tesla’s domestically-made used cars that are more expensive than new cars. On a second-hand trading platform, it can be seen that many sellers’ price tags for the Model Y 2022 rear-wheel drive version and the long-endurance version are higher than the official price adjustments of 259,900 yuan and 309,900 yuan.
  On January 8, when I called Tesla’s customer service and asked whether Tesla would compensate car owners for the price reduction, the other party said that if there is a compensation plan, the official will notify it uniformly.
Why did Tesla cut prices?

  As for the reason for the price adjustment of Tesla’s domestic models, Tao Lin, Tesla’s vice president of external affairs, posted on her personal Weibo that behind Tesla’s price adjustment is essentially a unique and excellent law of cost control. “Based on first principles”, adhere to cost pricing.

  According to the annual production and sales data released by Tesla, in 2022, Tesla’s annual output will be 1.3696 million vehicles, a year-on-year increase of 47%; the annual delivery volume will be 1.3139 million vehicles, a year-on-year increase of 40%. Although the production has exceeded the million mark, the actual delivery volume is still far from the 50% increase target set by Tesla CEO Elon Musk in early 2022. It is worth noting that Elon Musk has previously stated that Tesla will continue to choose the path of price cuts. On December 22, 2022, Elon Musk has publicly stated that he prefers to grow as fast as possible without putting the company at risk, and increase sales by cutting prices.
  A staff member of a new energy vehicle brand said that the reason for Tesla’s price cut this time is that the production capacity of Tesla’s Shanghai plant has exceeded its sales growth in the Chinese market. According to Tesla’s public information, the production capacity of Tesla’s Shanghai plant in 2021 will be 480,000 vehicles. After the renovation and upgrading are completed in 2022, the factory’s production capacity has increased to 1.1 million vehicles, an increase of about 127%. When the order volume cannot match the high production capacity, the continuously operating factories need to maintain costs, and the order sales can be further stimulated through price cuts.
New energy car companies launch a new round of competition

  Affected by the withdrawal of the new energy vehicle subsidy policy, after entering 2023, in addition to more than a dozen new energy car companies such as BYD, Chery New Energy, and Changan Deep Blue, joint venture car companies such as Volkswagen and BMW have also adjusted some of their new energy vehicles upwards. car sale price. And if Tesla chooses to cut prices at this time, will it put pressure on other car companies?
  According to the reporter’s incomplete statistics, the price ranges of NIO ET5, Wenjie M7, Zero Run C11, Nezha S, Xiaopeng P7 and other models among new energy vehicle brands basically coincide with the domestic models of Model 3 and Model Y.
  An employee in the new energy vehicle industry said that Tesla took the lead in announcing a price cut, which will bring the new energy vehicle market into a stage of fierce competition in 2023. Although it will allow consumers who buy cars to enjoy benefits, it will not be effective for some cars with small profits. It is undoubtedly a “devastating blow” for enterprises.

  Cui Dongshu, secretary-general of the National Passenger Car Market Information Association, said that Tesla’s price cut is reasonable. Tesla’s first price cut in 2023 is mainly due to lower costs. Tesla’s market size has increased significantly, which has led to a reduction in costs, so the price should naturally be reduced.
  The auto industry research weekly report released by Shenang Securities pointed out that in response to the withdrawal of the new energy subsidy policy, foreign-funded car companies such as Tesla and Mercedes-Benz have chosen to cut prices to increase market share; With the expiration of the auto subsidy policy, auto companies such as BYD and GAC Aian chose to raise prices to protect their own profits.
  For car companies whose current sales are lower than expected or still committed to expanding their market share, they still dare not raise prices lightly at this stage. In general, the withdrawal of subsidies means that the new energy vehicle industry is slowly maturing, gradually shifting from policy-driven to market-driven, and will compete head-on with traditional fuel vehicles that are mainstream in the market. New energy vehicle companies will enter a new round of survival of the fittest.
  ”Tesla took the lead in announcing price cuts, which will bring the new energy vehicle market into a stage of fierce competition in 2023. Although consumers who buy cars thereafter can enjoy benefits, it will undoubtedly be ‘destroyed’ for some car companies with smaller profits. Sexual strike'”. ——A

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