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Monday, October 2, 2023

Tesla Raises Costs in the US, Japan, Canada and China

Tesla's website revealed the beginning price for the base Model Y and Model 3

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UNITED STATES: In Canada, China, Japan, and the United States, Tesla Inc. has increased pricing by up to $290, according to information published on the company’s website on Monday. This comes after the firm lowered the price of its best-selling vehicles since the year’s beginning.

The price increase was the first on its two best-selling models at the same time in some locations, despite the fact that after a wave of discounts, prices across its whole lineup are significantly lower than in January. In early trade, shares increased by over 2%.

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Elon Musk, the business’s chief executive, stated last month that the company would prioritise sales growth over profitability and hope to profit later from its implementation of self-driving software for a wider fleet of cars.

Tesla has adopted a pricing structure similar to that of airlines or ride-sharing services since January. Musk believes the business is ready to give up margin for increased sales volume but also wants to raise pricing where it can to keep up with production and delivery.

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Tesla’s website revealed that the beginning price for the base Model Y and Model 3 in the US had increased by $250, with similar changes in China, Canada, and Japan.

The Model 3, Tesla’s most affordable vehicle, saw its price rise for the first time since January, but prices in the US are still 14% lower than they were at the beginning of the year. In the US, the long-range Model Y is still 24% less expensive.

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According to a number of analysts, the change was consistent with Tesla’s dynamic pricing approach and was unlikely to reverse the major price reduction that caused the company’s gross margins to drop to a two-year low in the first quarter.

Tesla increased costs by $300 C$ (or $222 USD) for the performance-oriented Model 3 and Model Y models in Canada and 37,000 Yen ($269) or more in Japan for the base Model 3. This is not a successful reversal of the price cuts, according to Roth Capital analyst Craig Irwin.

Tesla increased the price of its versions in China by 2,000 Yuan ($289), citing a price battle with local electric car brands led by BYD Co Ltd. Last year, Tesla started lowering sticker prices in the world’s largest market.

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