Tesla raises prices of Shanghai-made Model 3, Model Y cars again even as China sales slide

Tesla’s deliveries in mainland China fell 34.2 per cent month on month in October, following a 32.8 per cent drop in September, according to CPCA
Analyst says the price increases will push consumers towards Chinese rivals Li Auto, Xpeng and Nio, which continue to post rising sales

Electric & new energy vehicles

Daniel Renin Shanghai

Published: 2:23pm, 14 Nov, 2023

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Tesla continues to raise prices of its cars in mainland China despite sales in the world’s largest electric vehicle (EV) market slipping further in October.

The US carmaker said in a post on Chinese social-media platform Weibo on Tuesday that it was increasing the price of its Shanghai-made Model 3 basic edition by 1,500 yuan (US$206), or 0.6 per cent, to 261,400 yuan. The price of the entry level version of the Model Y has been lifted by 2,500 yuan, or 0.95 per cent, to 266,400 yuan. The price adjustments are effective immediately.

The announcement follows two previous rounds of price hikes in the past three weeks. Tesla raised the price of the Model Y performance edition by 4 per cent on October 27, followed by increases to the long range versions of the Model 3 and Model Y by as much as 0.8 per cent on November 9.

“Some Chinese competitors will benefit from Tesla’s price hikes, which are expected to attract some consumers away from Model 3 and Model Y vehicles,” said David Zhang, a visiting professor at Huanghe Science and Technology College.

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Tesla adjusts the prices of its locally built vehicles regularly based on production costs, according to Grace Tao, Tesla’s head of communications and government affairs in China.

Tesla’s Shanghai Gigafactory delivered 28,626 units to mainland Chinese customers in October, a month-on-month decline of 34.2 per cent, according to data from the China Passenger Car Association (CPCA). It followed a 32.8 per cent month-on-month slide in September.

Li Auto, Xpeng and Nio, the three top Chinese EV start-ups that make premium battery-powered vehicles, reported rising deliveries in mainland China last month buoyed by their high-performance new models.

Beijing-based Li Auto broke its own record for the seventh consecutive month in October, delivering 40,422 vehicles, 12.1 per cent higher compared with September.

Guangzhou-headquartered Xpeng delivered 20,002 units in October, an increase of 30.7 per cent month on month, beating the previous record of 16,000 units set in December 2021.

Shanghai-based Nio said its sales in October rose 2.8 per cent month on month to 16,074 units. However, it was 21.4 per cent lower than the all-time high of 20,462 units in July.

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Tesla has been the runaway leader in China’s premium EV segment since its Shanghai factory, the company’s biggest production base worldwide, began delivering vehicles in January 2020. Currently, only the Model 3 and Model Y are produced here by the Texas-based carmaker controlled by Elon Musk.

Tesla began selling revamped versions of the Shanghai-made Model 3 on October 19, delivering the first batch to mainland buyers a week later.

The US carmaker delivered 378,800 vehicles in China from January to October, an increase of 62.2 per cent year on year, according to CPCA.

The association predicted the country’s EV industry would achieve a 50 per cent year-on-year sales growth in 2023, delivering a total of 8.5 million units to mainland Chinese customers.