Tesla is slightly raising the price of the base Model Y in China after an important price cut last month resulted in a significant increase in orders.
Last month, we reported on Tesla slashing prices in China, which raised demand concerns for the automaker in the important EV market.
The price drops on some Model 3 and Model Y trims were significant, and while it would have a negative effect on the company’s gross margin, we expected that it would be successful in increasing sales.
Several local reports confirmed that Tesla’s order rate significantly increased over the last month.
Now Tesla is even adjusting up its price on the base Model Y a bit.
In an update to its online configurator today, Tesla increased the price of the Model Y Standard Range by ¥2,000:
The Model Y now starts at 261,900 yuan, which is the equivalent of $38,577 USD, in China.
While Tesla increasing the price would indicate that the automaker is seeing a stronger order rate than it can handle right now, the company is still quoting a delivery time of 2 to 5 weeks for the base Model Y.
It’s the same for the longer-range Model Y and even a little faster for the Model Y Performance.
In January, Tesla China had an output of 66,000 electric vehicles out of China, but only 27,000 units were for the local market.
However, Tesla generally uses most of its early output out of China for exports to Europe and other markets early in the quarter and then focuses on domestic deliveries during the second half of the quarter.
Therefore, February and March numbers should be the ones confirming the impact of Tesla’s price adjustments in the important EV market.
In 2022, 22% of Tesla’s $81 billion in revenue came from China – making it Tesla’s second most important market after the US.