Tesla Now Raising Price Of Its Model Y In China

Possibly emboldened by the strong demand it spurred from price cuts just a month ago, Tesla is now raising the price of its Model Y in China back to 261,900 Yuan. 

The price of the vehicle had been cut to 259,900 Yuan on January 6th from its original price of 288,900. The move not only shows that price cuts for the automaker could be over in China, but also that demand has likely firmed. 

Tesla will also be raising the price of the Model Y an unspecified amount in the United States, according to the same Bloomberg write up.

As we noted yesterday, price cuts seemed to be a plan that paid off for the automaker, which was mired in questions about slumping demand heading into the end of 2022. The worries sent the company’s stock spiraling lower to end last year, but shares have now doubled off the low they made on January 6, 2023, the day after the price cuts were announced. 

It marks a stunning move higher in a short amount of time when both Elon Musk’s financial solvency and Tesla demand were popular talking points among skeptics. 

The pop in shares has come as a result of Tesla finding success in driving more demand by cutting its prices. Heading into the company’s Q4 2022 earnings report, there were looming questions not only about whether or not the price cuts would work, but also whether or not they would drive down margins too much.

But just last weekend we noted that the company’s price cuts were helping spur demand in China that was so robust, it was bucking the national trend for EVs for the month of January. The company’s China segment shipped 66,051 vehicles in January, according to Bloomberg, citing preliminary data released by China’s Passenger Car Association. In December, that number stood at 55,800.

The figure is up 18% from December, while China’s new energy passenger vehicles, in total, are seen down 45% month over month from December to January. 

The company is now reportedly planning to increase output at its Shanghai plant – bringing its run rate back toward where it was in September 2022 – in order to continue meeting the demand from price cuts on its best selling models. 

Tesla had suspended operations at its Shanghai plant for a portion of December. The EV maker was expected to halt production – as we noted in a previous article – but continued swirling questions about demand had surfaced after the company shut down operations at the key location earlier than expected. Back on December 9th we wrote that the company was shutting down operations due to upgrades at the plant and waning consumer demand.

Meanwhile, looking at the broader scope of EV sales in China, domestic names like Nio, Xpeng and Li Auto all recorded monthly and YOY sales declines in January, per Jalopnik.