American electric vehicle giant, Tesla (NASDAQ:TSLA) announced a price hike Tuesday for all variants of the company’s Model 3 and Model Y vehicles in key markets, including the U.S., China, Japan, and Canada after several cuts this year. Citi analysts believe that the hike is not about recovering demand.
“According to our channel checks with dealers, we estimate new order bookings of Tesla China seeing c.-10% MoM decrease to 50-60k units in Apr-23 (vs. c.64k units in Mar-23), with valid orders pending for delivery at end-Apr around 40k units. During 1-May holiday we estimate around 2k units new orders have been generated per day,” wrote analysts.
In China, Tesla’s Model 3 now costs CNY 231,900 ($33,549), up from the previous price of CNY 229,900, according to the company’s website Tuesday. The Model Y is also 2,000 yuan higher at CNY 263,900, while the long-range and performance editions of the car are also priced CNY 2,000 higher.
In the U.S., the Model 3 and Model Y series of cars now cost $250 more. The Model 3 starts at $40,240, while the Model Y is priced at $47,240.
Analysts wrote in a note, “We read this Tesla price-hike action as neutral so far. If China NEV volume and new orders see significant recovery in May, we believe the high-beta and previously underperforming stocks should start to re-rate more relatively; Alternatively under a luke-warm with slow paced recovery MoM trend into May/June, we believe the names who could be able to consolidate the market to outperform, such as BYD, Tesla related auto parts (Sanhua/Tuopu), Li Auto, Fuyao glass, Huayu Auto, and Yutong bus.”
Shares of TSLA are down 0.25% in pre-market trading on Tuesday.