In September, Tesla shipped 83,135 electric vehicles produced in China, shattering its previous monthly high. As the American automaker continues to invest in manufacturing in China, the number represents an 8% rise from August and set a record for Tesla's Shanghai factory since production began in December 2019.
Tesla is suddenly lowering pricing in China after raising prices repeatedly this year. The price of the entry-level Model 3 sedan dropped by about 5% to 279,000 yuan, and the price of the entry-level Model Y SUV dropped by 9% to 316,000 yuan. The manufacturer reduced prices across the board for its products in China. Price reductions are being made as worries mount that economic difficulties in China may be causing demand to decline. During last week's results call, CEO Elon Musk stated as much, asserting that "China is undergoing a recession of sorts," primarily due to a slowing real estate market.
Although Chinese automakers like BYD, who sold a record 200,973 cars in September, and others like Nio, Li Auto, and Xpeng are providing Tesla stiff competition in China's EV market, which is the largest in the world, Tesla did reach an all-time sales high in September. Many analysts believe that the price reductions will temporarily increase demand despite this.
Xpeng EV Models
Ming Hsun who is an analyst at the Bank of America, said to clients, “We expect Model 3/Y volume sales to improve, given: (1) the entry price of Model 3 is lowered by 4.7%, and Model Y’s is lowered by 8.9%; (2) TSLA’s price change has been long awaited by Chinese consumers, thus they were in a wait-and-see mode earlier.”
Hsun thinks that reduced order wait times brought about by Giga Shanghai's expanded capacity and China's slowing EV growth forced Tesla to lower prices. Hsun speculates that in order to maintain a pricing advantage, Tesla's rivals may also go into a price war of sorts. Tesla's pricing reductions, according to CMBI analyst Shi Ji, will likely inspire competitors to do the same.
Restart of Referral Program
Additionally, Tesla is relaunching its referral program in an effort to boost sales by rewarding customers. Customers can earn rewards through a program called "Treasure Chest" Points Rewards when they use referral links to sign up new customers. New customers and referrals now receive points that can be redeemed for incentives like free Supercharging miles, Tesla accessories, or in-vehicle software updates.
The points can also be used to enter quarterly or annual Tesla drawings for prizes including VIP factory tours, up to $45,000 in Tesla boutique purchases, or a year's worth of use of a Model 3 or Model Y car.
TWITTER DEAL UPDATE
Elon Musk has informed co-investors who agreed to contribute money to his $44 billion purchase of Twitter that he intends to complete the transaction by Friday.
Musk's attorneys have provided the necessary documents for the finance pledge to equity investors Sequoia Capital, Binance, Qatar Investment Authority, and others. The step is the most glaring indication yet that Musk intends to abide by the judge's Friday deadline set by a Delaware court.
The final debt financing deal has been put together and is currently being signed by the banks that agreed to provide funding for Musk's acquisition of Twitter. On Tuesday, Twitter stock was trading 3% higher at $52.95 than it had been at $54.20 earlier in the day as a result of the news. Musk has pledged to provide $46.5 billion in equity and debt financing for the acquisition, covering the transaction's $44 billion cost as well as closing expenses.
The purchase will be backed by 13 billion dollars in debt financing from institutions like Morgan Stanley and Bank of America Corp. Larry Ellison, a co-founder of Oracle Corp., and Saudi Prince Alwaleed bin Talal will contribute $7.1 billion as equity investors. The deal's completion will put an end to months of rumors that the unpredictable entrepreneur would back out of the acquisition.
Musk has promoted himself as a supporter of free speech and has criticized Twitter's strategy for policing violent or abusive content, which has resulted in the banning of numerous well-known conservative speakers.