Considering that many other automakers are also raising prices, the team does not expect any structural impact on future demand.
(Image credit: CnEVPost)
Xpeng Motors (NYSE: XPEV, HKG: 9868) confirmed earlier today previous media reports of impending price increases for its models, and Deutsche Bank analyst Edison Yu's team offered their take on it.
The move will help offset rising raw material costs, especially related to batteries, the team said, adding that they don't expect any structural impact on future demand, given that many other automakers are also raising prices.
Xpeng's order book has remained strong despite the recent Covid lockdowns. Delivery logistics have been restricted in Shenzhen so that will impact March volumes but the Shanghai headwind should be fairly minimal, the team said.
Unlike the US and Europe, most Chinese EV makers didn't raise pricing last year because battery suppliers absorbed most of the higher prices, the team noted.
However, that is rapidly changing as some automakers have now announced price increases, including Tesla, BYD, Neta, Great Wall Motor's Ora brand and Chery, the team said.
Yu's team also noted that Tesla raised the price of its standard-range models in China once this month and raised the price of its long-range and performance versions twice.
Earlier today, Xpeng announced that it will raise the pre-subsidy prices of its models by RMB 10,100 to RMB 20,000 ($3,140), which will go into effect at 0:00 on March 21 and will not affect those who pay a deposit before then.
CnEVPost notes that while rising raw material prices and a reduction in Chinese subsidies for new energy vehicles have put pressure on Xpeng to raise prices, Tesla's actions may have been one of the key reasons that allowed it to raise prices significantly.
Tesla raised the prices of the entry-level Model 3 and Model Y in China by 10,000 yuan and 21,088 yuan, respectively, on December 31 last year.
In the past week, Tesla made three price increases, bringing the price of the entry-level Model 3 to RMB 279,900, up RMB 29,000 from RMB 250,900 at the beginning of November last year.
The price of the entry-level Model Y now stands at RMB 316,900, up RMB 40,900 from RMB 276,000 at the beginning of November last year.
For comparison, Xpeng only raised the price of its models priced below RMB 300,000 by RMB 4,300-5,900 on January 11.
Tesla's actions this month have further widened the price gap between it and Xpeng models, thus providing the latter with a lot of room for price increases.
Tesla China price changes
| Date | Model | Prev Price | Change (RMB) | Change (%) | Latest Price |
|---|---|---|---|---|---|
| 20240401 | Model Y | 258,900 | 5,000 | 1.93% | 263,900 |
| 20240401 | Model Y Long Range | 299,900 | 5,000 | 1.67% | 304,900 |
| 20240401 | Model Y Performance | 363,900 | 5,000 | 1.37% | 368,900 |
| 20240112 | Model 3 | 261,400 | -15,500 | -5.93% | 245,900 |
| 20240112 | Model 3 Long Range | 297,400 | -11,500 | -3.87% | 285,900 |
| 20240112 | Model Y | 266,400 | -7,500 | -2.82% | 258,900 |
| 20240112 | Model Y Long Range | 306,400 | -6,500 | -2.12% | 299,900 |
| 20231128 | Model Y Long Range | 304,400 | 2,000 | 0.66% | 306,400 |
| 20231121 | Model Y Long Range | 302,400 | 2,000 | 0.66% | 304,400 |
| 20231114 | Model 3 | 259,900 | 1,500 | 0.58% | 261,400 |
| 20231114 | Model Y | 263,900 | 2,500 | 0.95% | 266,400 |
| 20231109 | Model 3 Long Range | 295,900 | 1,500 | 0.51% | 297,400 |
| 20231109 | Model Y Long Range | 299,900 | 2,500 | 0.83% | 302,400 |
| 20231027 | Model Y Performance | 349,900 | 14,000 | 4.00% | 363,900 |
| 20231019 | New Model 3 | New | NA | NA | 259,900 |
| 20231019 | New Model 3 Long Range | New | NA | NA | 295,900 |
| 20230814 | Model Y Long Range | 313,900 | -14,000 | -4.46% | 299,900 |
| 20230814 | Model Y Performance | 363,900 | -14,000 | -3.85% | 349,900 |
| 20230505 | Model S | 789,900 | 19,000 | 2.41% | 808,900 |
| 20230505 | Model S Plaid | 1,009,900 | 19,000 | 1.88% | 1,028,900 |
| 20230505 | Model X | 879,900 | 19,000 | 2.16% | 898,900 |
| 20230505 | Model X Plaid | 1,039,900 | 19,000 | 1.83% | 1,058,900 |
| 20230502 | Model 3 | 229,900 | 2,000 | 0.87% | 231,900 |
| 20230502 | Model 3 Performance | 329,900 | 2,000 | 0.61% | 331,900 |
| 20230502 | Model Y | 261,900 | 2,000 | 0.76% | 263,900 |
| 20230502 | Model Y Long Range | 311,900 | 2,000 | 0.64% | 313,900 |
| 20230502 | Model Y Performance | 361,900 | 2,000 | 0.55% | 363,900 |
| 20230217 | Model Y Long Range | 309,900 | 2,000 | 0.65% | 311,900 |
| 20230217 | Model Y Performance | 359,900 | 2,000 | 0.56% | 361,900 |
| 20230210 | Model Y | 259,900 | 2,000 | 0.77% | 261,900 |
| 20230106 | Model 3 | 265,900 | -36,000 | -13.54% | 229,900 |
| 20230106 | Model 3 Performance | 349,900 | -20,000 | -5.72% | 329,900 |
| 20230106 | Model Y | 288,900 | -29,000 | -10.04% | 259,900 |
| 20230106 | Model Y Long Range | 357,900 | -48,000 | -13.41% | 309,900 |
| 20230106 | Model Y Performance | 397,900 | -38,000 | -09.55% | 359,900 |
| 20230106 | Model S | New | NA | NA | 789,900 |
| 20230106 | Model S Plaid | New | NA | NA | 1,009,900 |
| 20230106 | Model X | New | NA | NA | 879,900 |
| 20230106 | Model X Plaid | New | NA | NA | 1,039,900 |
| 20221024 | Model 3 | 279,900 | -14,000 | -5.00% | 265,900 |
| 20221024 | Model 3 Performance | 367,900 | -18,000 | -4.89% | 349,900 |
| 20221024 | Model Y | 316,900 | -28,000 | -8.84% | 288,900 |
| 20221024 | Model Y Long Range | 394,900 | -37,000 | -09.37% | 357,900 |
| 20221024 | Model Y Performance | 417,900 | -20,000 | -4.79% | 397,900 |
| 20220617 | Model Y | 301,840 | 15,060 | 4.99% | 316,900 |
| 20220617 | Model Y Long Range | 375,900 | 19,000 | 5.05% | 394,900 |
| 20220315 | Model 3 | 265,652 | 14,248 | 5.36% | 279,900 |
| 20220315 | Model 3 Performance | 349,900 | 18,000 | 5.14% | 367,900 |
| 20220315 | Model Y Long Range | 357,900 | 18,000 | 5.03% | 375,900 |
| 20220315 | Model Y Performance | 397,900 | 20,000 | 5.03% | 417,900 |
| 20220310 | Model 3 Performance | 339,900 | 10,000 | 2.94% | 349,900 |
| 20220310 | Model Y Long Range | 347,900 | 10,000 | 2.87% | 357,900 |
| 20220310 | Model Y Performance | 387,900 | 10,000 | 2.58% | 397,900 |
| 20211231 | Model 3 | 255,652 | 10,000 | 3.91% | 265,652 |
| 20211231 | Model Y | 280,752 | 21,088 | 7.51% | 301,840 |
| 20211124 | Model 3 | 250,900 | 4,752 | 1.89% | 255,652 |
| 20211124 | Model Y | 276,000 | 4,752 | 1.72% | 280,752 |
| 20211119 | Model 3 | 235,900 | 15,000 | 6.36% | 250,900 |
| 20211027 | Model S Long Range | 859,990 | 30,000 | 3.49% | 889,990 |
| 20211027 | Model X Long Range | 909,990 | 30,000 | 3.30% | 939,990 |
| 20210911 | Model Y Performance | 377,900 | 10,000 | 2.65% | 387,900 |
| 20210804 | Model S Long Range | 829,990 | 30,000 | 3.61% | 859,990 |
| 20210804 | Model X Long Range | 879,990 | 30,000 | 3.41% | 909,990 |
| 20210730 | Model 3 | 250,900 | -15,000 | -5.98% | 235,900 |
| 20210716 | Model S Long Range | 799,990 | 30,000 | 3.75% | 829,990 |
| 20210716 | Model X Long Range | 849,990 | 30,000 | 3.53% | 879,990 |
| 20210708 | Model Y | NA | New | NA | 276,000 |
| 20210508 | Model 3 | 249,900 | 1,000 | 0.40% | 250,900 |
| 20210324 | Model Y Long Range | 339,900 | 8,000 | 2.35% | 347,900 |
| 20210324 | Model Y Performance | 369,900 | 8,000 | 2.16% | 377,900 |
| 20210101 | Model 3 Performance | New | NA | NA | 339,900 |
| 20210101 | Model Y Long Range | New | NA | NA | 339,900 |
| 20210101 | Model Y Performance | New | NA | NA | 369,900 |
| 20201001 | Model 3 | 271,600 | -21,700 | -7.99% | 249,900 |
| 20201001 | Model 3 Long Range | 344,050 | -34,150 | -09.93% | 309,900 |
