Tesla Raises Prices Sharply

Investing

Published: January 23, 2025 9:15 am

Tesla Inc. (NASDAQ: TSLA) recently raised prices on some cars in China, which is the world’s largest electric vehicle (EV) market. On the other hand, it is offering low financing rates in the United States. Now, it has sharply increased what it charges for its vehicles in Canada.

24/7 Wall St. Key Points:

Tesla Inc. (NASDAQ: TSLA) recently raised prices on some cars in China.
Now, it has sharply increased what it charges for its vehicles in Canada.
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Reuters reported about the price increase, “Tesla will raise prices of all its cars in Canada from Feb. 1, according to notices on its Canadian website, with prices of Model 3 going up by as much as C$9,000 ($6,254.78). Model Y variants will see increases of up to C$4,000, while all versions of Model S and X will rise by C$4,000, according to the website.” (C$4,000 is the equivalent of $2,800.)

What This Means for Investors

Tesla stock — Are investors even focused on sales and margins?

The Tesla news says something about what the EV company has to do to make money, and in some markets, make more money.

Tesla’s margins have become an increasingly larger issue because it has to measure them against demand. The Chinese market is crowded with local companies, led by BYD. In the United States, the competitors are legacy companies like Ford, GM, and Hyundai/Kia.

Tesla’s global unit sales last year were 1.8 million, down about 1% from 2023. It appears, based on these figures, the company will need to be aggressive in pricing if it wants to grow. According to WhichEV, when Tesla announced its most recent earnings, “To achieve the jump in sales, Tesla sacrificed its profit margins – with the company’s net profit margin for the quarter falling by 47%, dropping from 11% in Q3 2023 to just 5.8% in the latest quarter.” The EV maker did have modest unit growth in that quarter.

Interestingly, it seems Tesla’s investors are not focused on unit sales or margins. Its stock is up 98% in the past year. The focus on its market cap has moved to whether it will lead the emerging AI self-driving car sector.

Maybe what Tesla changes for its cars has become less important to Wall Street. That has not stopped speculation about why it raises prices in some markets and lowers them in others.

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