Why Tesla is increasing the price of its Model 3 (there is a real reason)

It didn’t take long for Tesla to react. The car manufacturer, known worldwide for its electric cars, has just announced a “very likely” increase in the prices of its Model 3s from July 1.

For good reason, the European Union has just voted for a new directive, further increasing customs duties on electric cars built in China. This decision comes after an investigation lasting several months by the European Commission.

If the measure taken by Brussels aims initially to balance the balance of power between Chinese manufacturers (subsidized by the Beijing government and who benefit from low-cost labor) and the other side, historic European manufacturers who are huge providers of jobs on the old continent.

Tesla pays the price

In the middle of this struggle for influence between an emerging power and a historic market that does not intend to fall without resistance, Tesla moves from one camp to another depending on the concerns of the moment.

In the case of this directive precisely, Tesla is (for the EU) on the wrong side of the fence. The company actually produces its Model 3 in Shanghai, China. It will therefore have to pay the same customs fees as other Chinese manufacturers.

Tesla increases its prices

In order to support this increase in customs fees, Tesla has decided to pass them on directly to the sale price of the car. On its website, the manufacturer explains simply: “lThe price of the Model 3 is expected to increase starting July 1, 2024 due to a potential increase in taxes on imports. »

At the same time, the brand encourages potential buyers to place orders quickly to benefit from “current” prices which are more attractive. Also a way to improve its sales figures before the close of the 2nd quarter of 2024, on June 30.

Tesla rounds off the corners

The American manufacturer could use this increase in customs fees to close a few more sales than expected. The brand would thus have a slightly better balance sheet for this second quarter, enough to reassure investors.

Because for now, the year 2024 is far from being a long, quiet river for Elon Musk’s brand. All the data is in the red and sales are collapsing. An increase in sales, even slight, in recent days, could allow Tesla to disguise the company’s situation in its next financial report.

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