On January 23, Tesla’s Canadian website showed that it will significantly increase the prices of its main models on February 1, 2025, including Model 3 prices will increase by 9,000 Canadian dollars (about 45,600 yuan), and Model S/X/Y prices will increase by 4,000 Canadian dollars (about 20,300 yuan).
In December 2024, Tesla raised the price of the Model S in the US market from US$74,990 to US$79,990, and the price of the Model S Plaid from US$89,990 to US$94,990, both of which increased by US$5,000.
Some of Tesla’s models in the Chinese market are also increasing in price. Not long ago, Tesla launched the Model Y refresh version in China, with a starting price of 263,500 yuan, an increase of 13,600 yuan over the old Model Y. In addition, the price of Tesla’s new Model 3 rear-wheel drive version has also been increased by 3,600 yuan.
Market analysts believe that with the continuous advancement of electric vehicle technology and increasingly fierce market competition, Tesla, as an industry leader, needs to constantly adjust its product strategy to maintain its competitive advantage. This price increase may be Tesla’s efforts to cope with market changes and optimize product structure.
May start a new round of global price increases
This time, Tesla’s substantial price increase in the Canadian market may start a new round of global price increases.
Previously, Tesla has carried out multiple rounds of price increases in many places around the world.
In March 2022, all models in North America increased from US$1,000 to US$5,000. Tesla CEO Musk said at the time that lithium shortages were an important reason for the rising cost of electric vehicles and the main limiting factor in inhibiting the increase in electric vehicle production.
Just two months later, in May 2022, Tesla raised the prices of two Model Y models in Canada. The company’s Canadian website shows that the prices of the Model Y long-range version and high-performance version have increased by 1,000 Canadian dollars to 83,990 Canadian dollars and 90,390 Canadian dollars respectively.
One month later, in June 2022, Tesla again significantly raised the prices of all models in the United States, with some models even increasing by $6,000, and the longest waiting time for delivery reaching one year. On the same day, Tesla’s Chinese website announced that the sales price of the domestically produced Model Y long-range version would be increased by 5%.
In May 2023, Tesla’s Chinese official website showed that the Model 3/Y models increased by 2,000 yuan across the board, with the starting price of Model 3 rising to 231,900 yuan and the high-performance version rising to 331,900 yuan; the starting price of Model Y rose to 263,900 yuan, the long-range version rose to 313,900 yuan, and the high-performance version rose to 363,900 yuan.
In the US market, the starting price of Model 3 rose to $40,240, and the high-performance version rose to $53,240; the starting price of Model Y rose to $47,240, the long-range version rose to $50,240, and the high-performance version rose to $54,240. The price increase is $250.
Tesla Model 3/Y models also increased in price by 37,000 yen in Japan, with the starting price of Model 3 rising to 5.406 million yen and the starting price of Model Y rising to 5.8716 million yen.
As for the reasons for frequent price adjustments, in April 2024, Musk said on social platforms that the prices of the traditional dealer model are also unstable, and consumers may not be aware of this. He said, “Other automakers are also constantly adjusting prices, usually through dealer markups or manufacturer/dealer incentives. It is naive to think that the suggested retail price is the actual selling price.” Musk also said that Tesla’s prices must be constantly adjusted to ensure that production matches market demand.
Can it return to the sales growth channel?
Musk believes that although Tesla will encounter sales pressure in 2024, it will return to the sales growth channel in 2025. He expects that unless there is a major negative event, Tesla’s car sales will increase by 20% to 30% in 2025.
Lei Jun, chairman and CEO of Xiaomi Group, recently forwarded a Weibo post by Li Xiaoshuang, vice president of Xiaomi Auto, and said that the delivery volume of Xiaomi SU7 exceeded that of Tesla Model 3 last month (December 2024).
According to data from Dongchedi, in December 2024, Xiaomi SU7 ranked fourth with sales of about 26,000 units in the domestic pure electric car sales list, while Tesla Model 3 ranked fifth with sales of about 21,000 units. It is worth noting that Model 3 sales decreased by 7,868 units from the previous month.
Model 3 sales are mediocre, and the new Model Y may become Tesla’s magic weapon to return to the sales growth channel.
On January 10 this year, the new Model Y officially landed on Tesla China’s official website, and the first edition model was launched at the same time, with a pre-sale price of 263,500 yuan. The official website shows that the delivery time is expected to be March, which is still subject to approval by regulatory authorities. The model has been upgraded in appearance, cockpit, and battery life, with dozens of new and upgraded configurations.
Tesla said that the new Model Y is the Model Y with the longest battery life in Tesla’s history. Data released by Tesla shows that the new Model Y accelerates to 0-100km/h in 4.3 seconds at the fastest. Combined with multiple vehicle optimizations, the new car achieves a range increase of more than 30 km, with a maximum range of 719 km (CLTC estimate), and an energy consumption of 11.9Wh/km (CLTC condition).
After the release of the new Model Y, Xiaomi, Huawei, etc. actively responded.
Lei Jun, chairman and CEO of Xiaomi Group, responded on his personal Weibo that friends who want to buy an SUV can wait (Xiaomi YU7) if they are not in a hurry. Lei Jun then reiterated that Xiaomi YU7 is expected to be launched in June-July, and the new car is undergoing final testing. If you are in a hurry and can’t wait for YU7, Model Y is also good.
Yu Chengdong, executive director of Huawei and chairman of the Intelligent Automotive Solutions BU, also said in his circle of friends that Zhijie R7 still maintains its leading advantage and looks forward to competing with Model Y. He also said that he would carefully dissect Model Y and learn its innovations and practices in simplifying architecture and reducing costs.
