Tesla raises prices three times in China to cover increasing costs

Tesla has raised its price for three times since this year in China, with each adjustment exceeding RMB 10,000. The official explanation gives that the adjustment is influenced by the RMB depreciation. But maybe the real result comes that Tesla’s intention of keeping profit rate. Reporters investigated yesterday that the several rounds of raising prices has not harmed Tesla’s sales volume.

On November 24th, Tesla Model X models face a rising price of RMB 22,000 to 35,800, and the selling prices after adjustments are RMB 888,000 to 1,381,200. In the meantime, Model X P90D will stop selling. Just on the day before, Tesla had just adjusted selling prices of Models S, which increase 4.45% to RMB 688,900 to 1,315,200. Reporters noticed that the company has made no adjustments in engine power, ranges or vehicle configuration in Model X or S.

Tesla said that the floating exchange rate is the main reason for price adjustments. In general, foreign commodities will consider a 3%-5% floating exchange rate in China. But Tesla has cancelled the 5% floating exchange rate in China to keep the same price across the global market, which means that changing exchange rate will influence Tesla’s prices greatly. Apart from exchange rate, the increasingly changing infrastructure is also one reason for the rising prices.

But the rising price has no impact on the sales volume. Data shows that Tesla has an increasing delivery volume in global market of 24,500 units in 2016 Q3, including 15,800 units’ Model S and 8,700 units’ Model X SUV. “Tesla has high-level customers, who are not sensitive to prices but focus on vehicles’ quality and characteristics. Tesla’s rising prices will not influence the sales volume.” An auto analyst said.