Tesla raises US prices for its vehicles by as much as $1,000

Electric car maker cut them to boost market share before increasing them to defend shrinking margins

A Tesla dealership in Schaumburg, Illinois. The company’s shares slumped by about 10 per cent after first-quarter results showed its price cuts were hurting margins. AFP

Tesla has raised the prices of its vehicles in the US, the third change in less than a month, bumping up the cost of Model X and Model S base and plaid cars by $1,000.

The base Model S now costs $88,490, still significantly lower than $104,990 at the start of the year before the Elon Musk-led company started cutting prices globally.

The price of the Model X rose to $98,490 while the plaid version now sells for $108,490.

Tesla also lifted the prices of its best-selling Model Y by $250 to $47,490, according to its website.

The electric car maker has tinkered with its prices at least six times this year — cutting them to chase targets and boost market share, and raising them to defend shrinking margins.

“Tesla is attempting to increase its margin as it has faced a sharp decrease in profits from several rounds of earlier price cuts,” said John Zeng, managing director of consultancy LMC Automotive in Shanghai.

He also said Tesla was pushing through incremental raises as a signal to potential customers that its price adjustment direction was reversing.

The company’s shares slumped by about 10 per cent on April 20 after first-quarter results showed the aggressive price cuts were hurting margins.

Tesla has risen 5.6 per cent in the three weeks since and is up 40 per cent this year overall.