Elon Musk’s Tesla on Friday raised prices on certain Model Y vehicles sold in the U.S. market by $1,000, according to the company’s website.
The electric vehicle maker raised the price of its Model Y rear-wheel drive and long-range vehicles to $43,990 and $48,990, respectively. Prices of the Model Y Performance variant and other models of the car remained unchanged as of Friday, according to the website.
In February, Tesla temporarily cut prices of some of its Model Y cars in the U.S. until Feb. 29, nearly a month after it cut prices in Europe and China.
“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” Tesla CEO Elon Musk said last month when responding to a post from Tesla on X, formerly Twitter, that indicated prices would go up in March.
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Car buyers in the U.S. have opted for hybrids over EVs in the past few months due to higher ownership costs and some EV models losing their eligibility for federal tax credits over battery sourcing requirements included in the Inflation Reduction Act.
In January, Tesla warned of “notably lower” sales growth this year as it focuses on the production of its next-generation electric vehicle, which is code-named “Redwood.”
Tesla’s latest price hike may help the company’s margins, which were strained over the last year as the company and other EV-makers engaged in a price war that impacted its profitability in a bid to preserve market share.
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The company is bracing for competition from a growing number of cheap EVs, such as those made by China’s BYD, which surpassed Tesla as the world’s leading EV maker in the final quarter of 2023. BYD has begun selling vehicles in Europe and is eyeing a potential entry into the U.S. market.
Tesla shares are down over 18% in 2024 so far and are up a little more than 4.5% over the past year.
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Reuters contributed to this report.