Tesla increases vehicle prices of its vehicles, just after its recent price cuts in China. As Tesla announced price cuts, there was chaos as customers who bought the vehicle for higher prices raised their concerns. There were also incidents where customers opened a petition asking for some kind of discount or consideration with respect to Supercharger fees or Tesla FSD.
However, now it appears that the price cut was only temporary. The company is getting back to increasing the vehicle price. Tesla has increased the starting price of its Model Y crossovers by 0.8% to 261,900 yuan ($38,577.11) in China. Tesla raised the price for the rear-wheel drive version of Model Y by 2,000 yuan from 259,900 yuan previously, according to the price information listed on the company’s Chinese website on Friday.
The U.S. automaker planned to step up output at its Shanghai plant over the next two months to meet demand stoked by aggressive price cuts on its best-selling models, Reuters reported previously. Its market share in China’s battery electric car sector rose to 12.5% in January from 9% in December, according to a Reuters calculation based on industry data. Tesla kept the prices for other versions of Model Y and the Model 3 cars unchanged.
Increaing prices in the US
The electric vehicle company bumped up the price of the Model Y Long Range version by about 2% to $54,990 and the Performance version by about 2.7% to $57,990, according to its website. The prices exclude shipping and an order fee. The moves, made last week, come three weeks after Tesla cut prices by nearly 20% on some versions of the Model Y, the company’s top-selling vehicle. The price cuts were made to boost sagging demand, and also to make more versions of the Model Y eligible for the $7,500 electric-vehicle tax credit in the Inflation Reduction Act. The full tax credits will be available at least into March.
The Treasury Department revised vehicle classification definitions to make more EVs, including SUVs made by Tesla, Ford and General Motors, eligible for the full $7,500. The change came after lobbying by automakers that had pressed the Biden administration to change vehicle definitions to allow higher-priced vehicles to qualify for the maximum credit. Tesla CEO Elon Musk met with top aides to President Joe Biden last week to discuss the EV industry and the broader goals of electrification. While the increase in prices appeared reasonable in the US, due to the EV tax credit eligibility. It remains unclear how the company will go ahead in China.