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Tesla hikes prices in US and China despite rivals' cuts and incentives

Tesla's end-of-quarter price cuts come to a close with Q1 delivery numbers coming on Tuesday.

Tesla (TSLA) is hiking prices across a number of regions on the first day of its second quarter.

In the US, Tesla hiked prices of its popular Model Y SUV across all three trim levels by $1,000. Tesla did the same in China, with the Model Y Long Range version rising by 5,000 yuan ($675) to 304,900 yuan, with the Performance version also rising by 5,000 yuan, to 368,900 yuan.

SHANGHAI, CHINA - NOVEMBER 06: People look at a Tesla Model Y SUV at the Tesla booth during the sixth China International Import Expo (CIIE) at the National Exhibition and Convention Center on November 6, 2023 in Shanghai, China. The 6th China International Import Expo kicked off on Sunday, with many cutting-edge technologies and new products making their debuts at the event. (Photo by VCG/VCG via Getty Images)
People look at a Tesla Model Y SUV at the Tesla booth during the sixth China International Import Expo at the National Exhibition and Convention Center on Nov. 6, 2023, in Shanghai, China. (VCG/VCG via Getty Images) (VCG via Getty Images)

Both price hikes were expected, as the company had used price incentives to move vehicles before the first quarter came to a close on March 31; Tesla’s US website had been warning buyers for weeks that prices would rise on April 1. Tesla also hiked the price of its Model Y in select regions in Europe by 2,000 euros in late March in a bid to incentivize sales.


Meanwhile, Tesla’s rivals in the US and China have been cutting prices to gin up demand in those markets. On Monday, Chinese EV maker NIO announced via its Weibo account a number of incentives like battery swap benefits, self-driving software subscriptions, and goodies like the NIO phone to get more buyers to buy its EVs. In addition, XPeng extended existing price cuts of its G9 SUV by 20,000 yuan ($2,700) through April 30.

Tesla’s moves today come as the automaker is expected to announce its Q1 global delivery figures tomorrow. It has been a rough Q1 for Tesla thus far from a stock performance perspective and concern is growing that a weak Q1 report will spell more trouble for shareholders.

Analysts expect Tesla to have delivered 453,964 vehicles for Q1, per Bloomberg consensus estimates. That figure would be a 6% drop sequentially from the fourth quarter, but more concerning would be any figure below the approximately 423,000 vehicles the company delivered a year ago.

Deutsche Bank believes this will be the case, with Q1 deliveries coming in at 414,000 units, well below analyst expectations.

Even for Tesla bulls like Dan Ives of Wedbush see the Chinese market as alarming.

“The biggest and most concerning issue for Tesla (and its investors) remains China as rising EV competition and a lingering price war has made this key market very challenging,“ Ives wrote in a note last week. “[Overall negativity is] warranted as growth has been sluggish and margins showing compression with China a nightmare.”

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.

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