Tesla Raises Prices of Premium S, X Models by $2,750 in China (Image credit- Bloomberg.com)
Following a price increase this week for its best-selling vehicles, the Model 3 and Model Y, Tesla increased prices for its premium models in China.
Following the implementation of several rounds of drastic cuts earlier this year, the company has reversed course with this action.
The company would be raising prices in China, which is its biggest overseas market, for all variations of the Model S sedan and Model X sports cars. Both vehicles now have starting prices of 808,900 yuan ($117,060) and 898,900 yuan ($130,084), respectively, according to a report.
Elon Musk, the CEO of Tesla, said the two premium models are of small relevance to the future of the company, thus adjusting the prices of its higher-end vehicles will have considerably less of an influence on Tesla’s financial position. In March, he added that the corporation would put sales growth ahead of profitability, which is why this hike was put into effect.
Other markets, such as the US, Japan, and Canada, as well as China, have seen price increases in recent days. With this action, the company has undone a recent string of price reductions that caused its profit margin to drop to a level not seen in the past three years.
According to the reports, Tesla has raised the cost of its Model Y and Model 3 Sedan in several locations for its best-selling vehicle. Both vehicles’ starting prices in China have risen by 2,000 yuan ($289), to 263,900 yuan ($38,179) and 231,900 yuan ($33,550), respectively.
The Tesla Model Y now has a starting price of $47,340 in the United States, and the Model 3 now has a starting price of $40,240. Canada received a $222 hike for both of its top-selling vehicles, while Japan received a $269 increase.
While the increase is encouraging for the business after a string of setbacks, the reports claim that Tesla’s vehicle prices are still lower than they were at the beginning of the year. This is because the company has been implementing rounds of price reductions around the globe to boost demand, including in China and Europe.
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Since the year began, Tesla has frequently adjusted the prices of its products in response to market conditions. Musk hinted during the results call last month that the company will focus on increasing sales volume rather than profit margins.
According to him, the business “over time will be able to generate significant profit through autonomy.” Following this declaration, as per reports the company had increased the starting price point for its base models in the United States on its website, which had resulted in an increase in price across the board.
