EV of the Week: Pay Increases and Price Discounts at Tesla

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Investing.com — Your weekly pro roundup of the biggest headlines in the electric vehicle sector over the past week. As the EPA updates its standards and U.S. worker wages rise, Tesla has made more than price cuts. Additionally, VinFast entered India with large investments.

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Tesla’s Trial: Scope, Payments, Pricing, Pause

Tesla Inc (NASDAQ:) has had a tough week. First, the EV giant faces challenges as it revises range estimates for electric vehicles. In response to new U.S. government regulations, Tesla has adjusted range estimates for various models to accurately reflect real-world performance. The move follows concerns that Tesla’s range estimates exceed actual performance, sparking dissatisfaction among customers.

Tesla’s Model 3 also received a redesign in North America, maintaining its price despite the refresh. The updated long-range model boasts an expanded range of 341 miles per charge along with new enhancements and color options. The move aims to revitalize Tesla’s vehicle lineup within key markets following price competition and discounts in 2023.

The electric vehicle giant’s shares fell Thursday after the company announced it would implement pay raises for workers at its California auto plants. toyota (NYSE:), Volkswagen (ETR:), Hyundai (OTC:). The pay increase comes as the United Autoworkers Union (UAW) seeks to increase its membership in the U.S. by capitalizing on successful 2023 negotiations with major Detroit automakers.

But Tesla’s decision to raise salaries could complicate CEO Elon Musk’s emphasis on cost-cutting measures. Musk, a strong critic of unions, has consistently emphasized the challenge of making electric vehicles more affordable, especially as interest rates rise.

Complicating Musk’s cost-cutting goals further, Tesla has officially cut the prices of its Model 3 and Model Y in China, reducing them from Rmb6.5k to Rmb15.5k.

Analyst surveys show that the price decline was not as large as market expectations. The new MSRP for the base Model 3 is now Rmb245.9k, and for the base Model Y it is Rmb258.9k.

Finally, Tesla announced that it would temporarily suspend production at its factory near Berlin, scheduled for January 29th through February 11th. The disruption is believed to be due to recent attacks on ships in the Red Sea resulting in adjustments to shipping routes.

Shares of TSLA closed trading on Friday down 7.4% for the week.

VinFast enters India

Vietnam’s VinFast Auto (NASDAQ:) has announced plans to build its first EV facility in the southern state of Tamil Nadu in a strategic move to tap India’s fast-growing electric vehicle (EV) market. The electric vehicle manufacturer aims to invest a total of $2 billion, including $500 million in initial investment, over the first five years of the project.

VinFast’s entry into the Indian market comes as the company seeks opportunities to establish itself in the world’s third-largest automotive market. The facility, scheduled to begin construction later this year, will include an EV and manufacturing plant and is expected to be able to produce up to 150,000 vehicles per year. The facility is expected to create 3,000 to 3,500 jobs.

The Tamil Nadu government has expressed its support for the venture by providing cleared land for the manufacturing unit and ensuring uninterrupted power supply along with other essential infrastructure support.

VinFast also unveiled its latest electric models at CES 2024, introducing the VF (NYSE:) Wild, a midsize pickup truck, and the VF 3, a compact eSUV. VF 3 is designed for smart, sustainable and accessible urban mobility targeting a range of 125 miles per full charge. The company plans to launch the VF 3 globally, with reservations expected to begin later this year.

Shares of VFS closed trading on Friday down 6.65% for the week.

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