back front. Tesla raised prices for its Model Y and Model 3 variants by about $300 more in the US, China, Japan and Canada, after annual discounts of between 11% and 25% depending on models and regions, and prices on top-selling vehicles (the Model S and X are left with less than 5 %).
In detail, the world’s leading battery-powered automaker raised its base price in the US by $250, for the second time in less than two weeks. In China, the increases for the two variants are 2,000 yuan, which equals $289. In Canada, the upward adjustment of the list price came to $300 for the Model 3 and Model Y in the Performance Edition. However, in Japan, prices for the entry-level Model 3 have increased by $269.
The move comes after the company posted its lowest profit margins in two years: 19.3% versus 22.4% expected gross margin and 11.4% from 19.2% a year earlier. Tesla missed market estimates after aggressively adjusting prices to stimulate demand and thwart increasingly fierce competition. The Austin-based automaker began a policy of cuts in January in many markets around the world to catch up with traditional American competitors like Ford, as it tries to keep up with Chinese automakers, especially BYD, in its second-largest market.
On Tuesday, May 2, rival Ford instead slashed prices of its electric Mustang Mach-E by about $3-4,000, depending on the model, whose sales have fallen 20% in the first three months of the year. The premium rear-wheel-drive version is down from $50,995 to $46,995. Ford had already opted for a $5,900 cut on the electric crossover in January, while last August it slapped hikes of between $3,000 and $8,000, as a result (officially) of supply difficulties and raw material costs. Ford also said that all standard range models will be powered by performance-enhancing lithium iron phosphate batteries.
Elon Musk, CEO of Tesla, indicated during the conference call in which he commented on the financial results for the first quarter, last April 19, that the Texas company will give priority to volumes over profits in a macroeconomic environment characterized by uncertainty, high inflation and high interest rates.
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