Tesla raised the prices of its made-in-China Model Y sport-utility vehicles (SUVs) by 8,000 yuan (US$1,227) on Wednesday, which suggested it was comfortable with the sales of the car, an analyst said.
Less than three months after their launch in mainland China, Model Y’s Long Range version will now sell for 347,900 yuan (US$53,350), up from its quotation price of 339,000 yuan on January 1, while its Performance Range now sports a price tag of 377,900 yuan, according to the Palo Alto, California-based carmaker’s China website.
“The price rise shows that Tesla is comfortable with the sales of the Model Y,” said David Zhang, an analyst with North China University of Technology’s research centre for automobile industry innovation. “Technically, it is using pricing to ease a supply shortage amid a buoyant market for its products,” he added.
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Tesla, which also sells locally built Model 3 cars on the mainland, is the runaway leader in China’s premium electric vehicles (EV) segment. And while it has not disclosed the number of orders it received for the Model Y, the SUV was greeted with much enthusiasm and fanfare, according to two executives working with car components makers.
The carmaker’s Gigafactory 3 in Shanghai’s Lingang free-trade zone was facing an uphill task when it came to assembling enough Model Ys to fulfil orders.
Last month, Tesla delivered 4,630 Model Ys, higher than the 1,641 SUVs it delivered in January, according to data compiled by the China Passenger Car Association. It slashed the original price of pre-ordered Model Ys by 30 per cent at the start of the year.
A clutch of mainland Chinese EV start-ups, including NIO and Xpeng, are competing with the US carmaker for wealthy customers amid an acceleration in the demand for such cars. Conventional carmakers such as Volkswagen, Zhejiang Geely Group and Dongfeng Motor have also joined the fray and have announced plans to launch their own premium EV models this year.
Last year, Tesla delivered about 140,000 Model 3s to customers in mainland China, accounting for about an eighth of the country’s total EV deliveries, which hit 1.17 million units in 2020.
Its operations hit a speed bump last month after its executives were grilled by regulators over safety issues and incidents reported by consumers. The company said it was strengthening the internal management at its Shanghai factory to better safeguard consumer rights.
The Wall Street Journal reported last week that Beijing had restricted the use of Tesla vehicles by military staff and employees of key state-owned companies due to security concerns. The company was found to use cameras and ultrasonic sensors inside its cars, the report said.
Speaking at the China Development Forum on Saturday, Elon Musk, Tesla’s chief executive, downplayed the concerns and dismissed speculation that its vehicles could be used for spying.
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