The price of some models increased by at least $1000 on Tesla‘s official website on March 4.
Previously, the price of all Tesla models in China increased three times in a row. Tesla said it was unclear whether prices would continue to rise in the future.
Major general Ding, founder of nail technology, told the Securities Daily: “Tesla’s price rise is not an isolated event. In fact, the whole new energy vehicle industry is raising prices. The direct reason is the rise in the prices of upstream raw materials, including lithium, nickel, cobalt and other metals and chemical materials. In addition, the epidemic has led to the rise in logistics and transportation costs, and the international situation has led to the instability of supply chain expectations, forming multiple waves of price rises.”
Tesla announced price increase worldwide
On April 7, Tesla’s official website showed that the prices of some model 3 models were raised by at least $1000. Specifically, the long-range version of model 3 was raised by $1500 to $5599; The high-performance version was raised by $1000 to $629900.
According to the reporter of Securities Daily, since the end of 2021, Tesla has raised its selling price for many times around the world due to cost pressure. Especially from March 10 to March 17 this year, in just eight days, Tesla raised the prices of its products three times, with a price increase range of 1506000 yuan to 30000 yuan. Among them, the domestic modely high-performance model increased by 30000 yuan.
Specifically, on March 10, Tesla announced to adjust the selling prices of some Model3 and modely models in the Chinese market by 10000 yuan. On March 15, based on the previous price increase, the price of the above models was raised again, with a price increase of 1800020000 yuan. On March 17, Tesla raised the price of modely rear wheel drive model by 15060 yuan.
Zhang Xiang, President of New Energy Vehicle Technology Research Institute of Jiangxi new energy technology vocational college, said in an interview with reporters: “Tesla’s price rise is caused by many factors. The first is the contradiction between supply and demand. The new energy vehicle market has developed very rapidly in the past two years. Last year, the global market growth rate exceeded 100% and the Chinese market growth rate exceeded 160%. The fast-growing sales volume has played a great role in driving the upstream raw materials. In order to solve the contradiction between supply and demand of upstream raw materials, the most effective solution is to raise the price.”
\u3000\u3000 “In addition, Tesla, as the sales champion of new energy vehicles in the world, has many users and fans around the world. Everyone is willing to pay a deposit and wait in line for the delivery of new vehicles, which is also a contradiction between supply and demand. In the case of short supply, Tesla has the confidence to raise prices. There is no need to worry that the price increase will reduce the competitiveness of enterprises and competitors will seize its market position. This is also the reason why Tesla has raised prices many times.” Zhang Xiang further said.
It is worth mentioning that when the subsidy declined at the end of last year, the prices of Tesla Model3 rear drive version and modely rear drive version also increased by about 10000 yuan and 21000 yuan respectively. At the same time, Tesla has not only raised prices for the Chinese market for many times, but also made significant adjustments to the price of models on Tesla’s official website in the United States for many times. The starting price increase range of model 3 / y is $2000 – $3000. The starting price of models / x increases from $5000 to $12000.
Zhang Xiaorong, President of the deep science and Technology Research Institute, told the reporter of Securities Daily: “as the industry enters the outbreak period and the market demand continues to expand, the price rise trend may still appear in the short term.”
Chinese auto enterprises start the follow-up mode
In addition to Tesla’s price adjustment for many times, some Chinese new energy vehicle enterprises have also announced price increases.
In April 6th, the Arctic Fox Motor announced on the official account of WeChat public platform that it decided to start a certain price adjustment for all the models of polar fox brand from May 1, 2022, and the specific adjustment plan will be announced before April 30, 2022. Chery new energy also announced on the same day that it would raise the price of some models by 29005000 yuan. The price adjustment will take effect from 0:00 on April 7.
On April 2, krypton automobile announced that it would raise the price from May 1, and the specific price increase plan will be announced before April 30. On March 31, SAIC Roewe announced that it would adjust the official guidance prices of some Roewe i6maxev models and Roewe ei5 models from 0:00 on May 1, with the price raised by Dingli Corp.Ltd(300050) 00 yuan.
According to the statistics of the reporter of Securities Daily, including the above-mentioned car enterprises, nearly 20 car enterprises, including Great Wall Euler, SAIC GM Wuling, Byd Company Limited(002594) , Xiaopeng, Nezha, Geely geometry, Zero run, Dongfeng lantu and Chang’an new energy, have officially announced price increases.
Major general Ding told reporters that China Shanxi Guoxin Energy Corporation Limited(600617) automobile industry is facing the same cost pressure as Tesla. At the same time, I’m afraid the stability of the supply chain can’t match Tesla, so the price increase will become a collective action of the industry. Of course, after Tesla’s price rise, Chinese brands will follow the price increase, and the pressure of market competition will be relatively reduced, otherwise it will be more vulnerable to Tesla’s “dimensionality reduction”.
It is worth mentioning that in the statement of the official price increase of automobile enterprises, it is mentioned that the reason for the price increase is due to the continuous sharp rise in the prices of raw materials such as batteries and chips.
Zhang Xiaorong pointed out, “the impact of the price rise of upstream raw materials has been transmitted to downstream end products, and the price rise of new energy vehicles in the whole industry has become an irreversible trend. Chinese Shanxi Guoxin Energy Corporation Limited(600617) vehicle enterprises are all facing the pressure of rising costs, and the price adjustment of new energy vehicles is imminent.”
Major general Ding also said, “at present, the price rise of upstream raw materials has not peaked, the demand side is still strong, and the capacity expansion also needs a certain cycle, so the price of new energy vehicles will remain high in the short term. Of course, if the government introduces some regulation and control policies, such as cracking down on hoarding and increasing subsidies, the price rise will be relatively mild”.
In Zhang Xiang’s view, “with the rise of raw material prices, some adjustments have been made within the Shanxi Guoxin Energy Corporation Limited(600617) automobile industry chain. For example, the ore for refining lithium carbonate and lithium hydroxide has gradually changed from import to developing Chinese ore, so as to solve the problem of import ore gap. In the long run, with the release of China’s production capacity, the price rise of new energy vehicles will ease and gradually stabilize in the future”.
new energy vehicle sales growth remains unchanged
It is worth mentioning that although prices have risen many times, the rise in sales of new energy vehicles remains unabated. Since April, a number of new energy vehicle enterprises have announced the sales data of March and the first quarter, and a number of vehicle enterprises have reached new highs.
On April 2, Tesla announced the production and sales of the first quarter of 2022. In the first three months of this year, Tesla produced 305407 units, and the global delivery reached 310048 units, with a year-on-year increase of 67.7% and a month on month increase of 0.5%. On April 5, Byd Company Limited(002594) released the production and sales express. In that quarter, Byd Company Limited(002594) sold 286000 new energy vehicles, a significant increase of 423% year-on-year and 7.6% month on month.
In addition, Xiaopeng, ideal, Nezha and other new car making forces sold more than 30000 vehicles in the first quarter. Among them, in the first three months of 2022, Xiaopeng delivered 34561 vehicles, a year-on-year increase of 159%; Ideal cars delivered 31716 new cars in the same period, a year-on-year increase of 152%; Nezha delivered 30200 vehicles in the first quarter, a year-on-year increase of 305%.
Citic Securities Company Limited(600030) analysis said that the price of new cars is not the primary factor affecting the demand for new energy vehicles, so there is no need to be overly pessimistic about the price rise. Since the collective price rise of traditional fuel vehicles has almost never occurred, and the price generally only falls but does not rise, there are pessimistic voices in the market that the price rise may cause great disturbance to the demand for new energy vehicles this year. However, from the perspective of life cycle cost, new energy vehicles still have great advantages over fuel vehicles, especially the recent sharp rise in oil prices, which highlights the cost advantage of new energy vehicles.
Zheshang Securities Co.Ltd(601878) also said that the impact of the comprehensive price increase of new energy vehicles is short-term and limited, the demand for cars will not disappear due to the price increase, and the consumption trend of new energy vehicles is irreversible.
