Tesla Model 3 and Model Y receive latest round of price increases in US and China

The long range variants of the Tesla Model 3 sedan and Model Y crossover have received a $1,000 price adjustment in the United States. In China, select variants of the Model 3 and Model Y also received a price increase of RMB 10,000 (about $1,500). 

With the latest round of price adjustments, the cost of the Model 3 Long Range Dual Motor in the United States has increased from $50,990 to $51,990 before options and incentives. The Model Y Long Range Dual Motor, on the other hand, now starts at $59,990. The Model Y Performance now starts at $64,990 before options and incentives as well.

In China, the Model 3 Performance is the variant that saw a RMB 10,000 price adjustment, with the vehicle now starting at RMB 349,900 from its previous price of RMB 339,900. The Model Y Long Range now starts at RMB 357,900 from its previous cost of RMB 347,900, and the Model Y Performance now starts at RMB 397,900 from RMB 387,900 before options and incentives. 

While Tesla did not specify the reasons behind its latest round of price increases, it is believed that the recent adjustments were due to the rising price of nickel, which is used in the Long Range Model 3 and Model Y’s battery packs. This is hinted at by the fact that the base Model 3 RWD did not see a price increase. The base Model 3 RWD is equipped with a lithium-iron-phosphate (LFP) battery, which uses no nickel.

While the Tesla Model 3 and Model Y remain strong contenders in both the US and Chinese markets, the vehicles have received a number of key price adjustments over the past year. The price of the Model Y Long Range, for example, has jumped about 20% from January 2021. The Model 3 Long Range saw a 10.6% price hike in the same period. 

Morgan Stanley analyst Adam Jonas has warned that the rising cost of nickel would likely result in electric vehicles like Teslas seeing a price increase. Just recently, nickel surged above $100,000 per metric ton on the London Metal Exchange, prompting a trading halt. Several reasons are behind nickel’s price increase, though it is believed that a driving factor is Russia’s invasion of Ukraine. With potential sanctions being placed on Russian nickel, the supply of the material to Western countries might be constrained in the near future.

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