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MagyarTesla Model 3 Highland price hike due to rising production costs as BYD starts EV promos
After warming up the public about this move for a couple of days, Tesla raised the prices of the 2023 long-range Model 3 Highland and Model Y versions. One Tesla official has cited a rise in production costs as the culprit, even though EV battery-grade lithium carbonate has nosedived this year by 80% from its peak.
The Model Y price hike in China is by the equivalent of US$343, while the 2023 Model 3 price was raised by $206. These may sound like modest amounts, but they come on top of the Model Y LR price hike by US$1,920 at the end of October, while the Model 3 Highland launched with a higher price than the previous generation in the first place, despite that it was supposed to be a cost-saving exercise for Tesla.
Elon Musk is on record saying that Tesla has dynamic price adjustment structure and reacts based on market demand conditions and production costs, the changes in which it tracks on a daily basis. Alternatively, the Model 3 and Model Y price rise in China may be due to a marketing strategy to cram as many orders in Q4 as possible. Tesla needs to pad the delivery numbers for the last quarter of the year if it wants to hit its self-imposed sales target, so it has been warning buyers in China that they have to pull the trigger for several days prior to the price hikes.
Tesla's main EV competitor BYD, however, feels similar pressure as it aims to sell 3 million "new energy vehicles" this year, but it goes about it in a different manner. Instead of pushing customers to buy before a modest price hike, it runs promos.
After a price cut in the beginning of the month, BYD now runs a limited time promotion on several models, including on the electric Han SUV line that involves a direct $1,100 price cut as well as generous trade-in offers. It remains to be seen whose strategy will be more successful as BYD nearly matched Tesla's electric vehicle sales in the past quarter.
