Tesla Adjusts Prices Upward in Several Markets Amid Dynamic Pricing Strategy

By Kevin Armstrong
Tesla has once again adjusted their prices in various markets
Tesla has once again adjusted their prices in various markets
Tesla

Tesla Inc. has recently adjusted its pricing strategy, increasing the prices of its Model 3 and Model Y vehicles in Canada, China, Japan, and the United States. This change comes after a series of price reductions for the automaker's most popular models since the beginning of the year. Following the announcement, Tesla's shares experienced a nearly 2% increase in early trading.

Adopting a flexible approach, Tesla aims to match deliveries with output

In a shift from traditional fixed pricing models, Tesla has embraced a more dynamic approach similar to that of the airline and ride-sharing industries. The company's CEO, Elon Musk, revealed last month that Tesla's focus is currently on sales growth, with plans to generate profits later through the development and implementation of self-driving software on a larger scale.

With this strategy in mind, Tesla has tried to balance sales volume with margin sacrifices, intending to raise prices where necessary to align vehicle deliveries with production output better.

As a result, Tesla has raised the starting price for its base model Model Y and Model 3 in the United States by $250. Similar price adjustments were also made in China, Canada, and Japan. This is the first instance of a price increase for the Model 3 in the US since January.

Price Still Lower than the Start of the Year

Despite these recent price increases, the rear-wheel-drive Model 3 remains around 14% cheaper in the United States than it was at the beginning of the year. Additionally, the long-range version of the Model Y is approximately 24% less expensive in Tesla's largest market.

Analysts suggest that these price adjustments reflect Tesla's evolving pricing strategy and are unlikely to significantly impact the company's gross margins, which reached a two-year low in the first quarter. As Tesla continues to refine its pricing strategy and prioritize sales growth, the company aims to maintain its position as a dominant player in the electric vehicle market while pursuing long-term profitability through its autonomous software.

Tesla Begins Testing FSD in China

By Karan Singh
Not a Tesla App

Tesla was recently granted permission to test FSD on Chinese streets – specifically in Shanghai. Just recently, Elon Musk visited China and discussed the potential for FSD to come to China.

Gearing Up for FSD China

This is just the first step for Tesla to begin its customer deployments of FSD – Tesla conducts similar ADAS testing in North America, where special testing vehicles and testing employees run the latest FSD (Supervised) versions against a gamut of real-world, real-life tests.

Tesla has recently been working on translating FSD release notes into multiple languages, alongside building a data center in Shanghai and establishing an FSD Operations and Labelling team at the same center. These are the first, key steps to bringing FSD to a new market that has unique and different traffic rules when compared North America.

China doesn’t have the regulatory hurdles or challenges that Tesla faces in Europe to bring FSD and has been working with Chinese corporations as well as the government, which has now provided its official approval for FSD testing in-country.

We might even see FSD deployed to early testing customers in China by the end of 2025.

ADAS Competitors

There are quite a few competitors in the Chinese market already- with challengers like Xpeng and Xiaomi working on building their own homegrown systems, mostly driven by a mixture of cameras, radars, ultrasonic sensors, and LIDAR. However, many of these systems face similar challenges to other non-Chinese competitors and don’t have the mileage under their belts to tackle Tesla’s dominating lead in data and data processing.

European Union

Tesla is poising itself for an FSD rollout internationally, with increased testing also taking place in the UK, France, and Spain – some of the key locations with unique infrastructure in the European Union. However, some EU-specific regulations restrict how FSD can perform – each and every action must be manually approved by the driver. Until that regulation is changed to adapt to systems like FSD, it won’t be making its way there just yet.

Tesla Cybertruck to Receive Charging Improvements in Upcoming Update

By Karan Singh
Not a Tesla App

Former Tesla VP of Powertrain and Energy Drew Baglino previously mentioned that Cybertruck would be receiving charging improvements soon.

Wes Morrill, Tesla’s Cybertruck lead engineer, recently reposted Baglino’s comments on the charge speed update on June 16th and mentioned that it would be coming soon via OTA.

Charging Improvements

The 4680 cell has seen some difficulties in its charge curve, similar to Tesla’s other vehicles that have been deployed with the 4680. Tesla has alluded to difficulties in the manufacturing curve previously, and also with engineering improvements to the new cell standard, and eventually stopped manufacturing the Model Y with the 4680 cells.

However, this is the first time that Tesla has begun to deploy major improvements to the 4680 cell. It appears the improvements will allow up to 154 miles to be recovered in 15 minutes, which is approximately a 30% improvement to current charge rates.

We’re hoping that these improvements to the 4680 will also translate to older Model Y vehicles that have 4680 cells, which will be key to the owners of these vehicles. 4680 production is currently mainly focused on Powerwall, Megapack, and Cybertruck – with Semi not using 4680 yet.

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