Tesla Model 3, Model Y Hit Speed Bump from China
You can’t tell by the company’s stock performance, but the Tesla (Get Tesla) – Get Tesla Inc report this week is pretty bad.
Earlier this week, Tesla announced a price increase for its entire range of vehicles. This was the electric vehicle maker’s second price hike this month after raising the price of some long-range models last week.
The Model 3 rear-wheel drive is priced from $ 44,990 to $ 46,990, while the long-range version of the vehicle is priced from $ 51,990 to $ 54,490.
At the highest end of the spectrum, the Model X Troy Motor is now priced at $ 138,990, up from पूर्वी 126,490 previously.
According to CEO Elon Musk, inflation is the main reason for the rise.
But inflation-driven inflation is a fire that Tesla is battling this week as Chinese companies produce.
Supply chain problems caused by the Covid-19 epidemic that plagued global production in 2021 are returning to China.
Recent outbreaks in 28 of the country’s 31 provinces have infected more than 15,000 people, prompting the country to tighten its grip on the epidemic.
As a result of these restrictions, Tesla’s Shanghai factory, which operates 24 hours a day, is being closed for Wednesday and Thursday, according to a notice reviewed by Reuters sent to suppliers and Tesla employees.
According to the China Passenger Car Association, the factory delivered 56,515 Model 3 and Model Y vehicles in February, up from more than 2,000 per day. Of these, more than 33,000 vehicles were delivered abroad, mainly to Germany and Japan.
In 2021, Tesla sold more than 150,000 Model 3s in China, an increase of 10% over the year. The company sold 170,00 of the most popular model Y SUVs in the country.
Shanghai authorities have actually resisted the city’s lockdown, but other parts of the country that are Tesla’s suppliers have not been as lucky.
Tesla was informed by a supplier last weekend that the country’s covid lockdown had affected its production and that its stock could last only two days, Reuters reported.
Tesla’s close ties with China
Tesla is the leading market share leader in the US, but Elon Musk and the company know that most companies’ growth aspirations are linked to their overseas performance.
Unlike many US tech companies that have vague ties to the Chinese government, Musk and Tesla enjoy a significant seat at the table.
Earlier this month, Musk cycled with Chinese Ambassador to the United States Qin Gang.
Close ties with government officials are proving beneficial for Tesla, which was able to deliver 50,000 vehicles each in the last three months of 2021. This rate speeds up Tesla’s delivery of more than 600,000 vehicles to China each year. The company manufactures 470,000 vehicles in China.
Last November, Tesla announced plans to invest 1.2 billion yuan ($ 187.91 million) to increase production capacity at its Shanghai plant. Tesla is the only foreign passenger car plant in China that is owned entirely by the company and is not forced to operate through a joint venture.
In 2021, Musk said, Tesla’s Shanghai plant has now surpassed the production capacity of its Fremont plant, which last year produced about 450,000 units. Since launching production in December 2019, Tesla has made the Shanghai factory its new main export hub.