Tesla Hikes Prices Despite Cuts And Incentives From Rivals

(CTN News) – Tesla (TSLA) raised its prices across a number of regions on the first day of its second quarter.

In the US, Tesla has raised the prices of its popular Model Y SUV by $1,000 across all three trim levels. Model Y Long Range was increased by 5,000 yuan ($675) to 304,900 yuan, and Model Y Performance was also raised by 5,000 yuan to 368,900 yuan.

Due to use of price incentives to move vehicles before the first quarter ended on March 31, both price hikes were expected; its US website had warned buyers for weeks that prices would rise on April 1. The Model Y price was also increased by 2,000 euros in select regions of Europe in late March to increase sales.

At the same time, Tesla’s competitors in the US and China have lowered their prices to increase demand in their respective markets.

NIO announced on Monday a number of incentives, including battery swap benefits, self-driving software subscriptions, and gifts, such as the NIO phone, to encourage consumers to purchase the company’s electric vehicles. Furthermore, XPeng has extended the current price reductions for its G9 SUV by 20,000 yuan ($2,700) until the end of April.

Tesla’s moves today coincide with its expected announcement of its first quarter global delivery figures tomorrow. Despite a rough Q1 stock performance, concern is growing that a weak Q1 report will result in more losses for Tesla shareholders.

Tesla delivered 453,964 vehicles in the first quarter. This would be a decrease of 6% sequentially from the fourth quarter. However, any drop below the approximately 423,000 vehicles the company delivered in the previous year would be even more concerning.

Analysts at Deutsche Bank believe this will be the case, since Q1 deliveries are expected to be 414,000 units, well below analyst expectations.

It is alarming even for Tesla bulls like Dan Ives of Wedbush.

A lingering price war and rising EV competition have made the Chinese market very challenging for Tesla (and its investors), Ives wrote in a note last week. As a result of slow growth and margin compression with China proving to be a nightmare, overall negativity is warranted.”

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