Tesla raises US and Chinese prices despite competitors' discounts.

On the opening day of its second quarter, Tesla (TSLA) is increasing pricing in some regions.

Tesla increased the price of its three-tiered Model Y SUV in the United States by $1,000. Just as in the US, Tesla increased the prices of its Model Y SUVs in China. The Long Range version went up 5,000 yuan ($675) to 304,900 yuan, and the Performance version went up to 368,900 yuan.  

There was anticipation of both price hikes due to the company's use of pricing incentives to move vehicles in the first quarter (ending on March 31) and weeks of warnings from Tesla's US website to purchasers that prices would rise on April 1. In late March, Tesla also tried to encourage sales by increasing the price of its Model Y in some European countries by 2,000 euros.  

To stimulate sales in the US and China, Tesla's competitors have been slashing prices. To encourage more people to purchase its electric vehicles, Chinese manufacturer NIO announced on Monday via its Weibo account a variety of incentives, including battery swap perks, subscriptions to self-driving software, and freebies like the NIO phone. Furthermore, XPeng maintained the 20,000 yuan ($2,700) price discounts on the G9 SUV until April 30.  

The announcement of Tesla's Q1 global delivery data is expected tomorrow, thus the company's actions today are fitting. When looking at Tesla's stock performance in Q1, things have been less than stellar, and shareholders are understandably worried that a poor Q1 report will only make things worse.

The consensus estimate from Bloomberg indicates that Tesla is expected to have delivered 453,964 vehicles for the first quarter. That number would be a sequential decline of 6% from the previous quarter, but a decline below the 423,000 vehicles supplied by the firm a year ago would be far more worrisome.

With first-quarter shipments of 414,000 units—far lower than analysts' expectations—Deutsche Bank is of the opinion that this will be the case.  

With increasing electric vehicle competition and a continuing pricing war making this crucial market very difficult, China continues to be the largest and most worrying issue for Tesla (and its investors). Last week, Ives penned a note. "[Overall pessimism is] justified due to slow growth and margin compression caused by the nightmare that is China."  

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