After four U.S. price cuts, Tesla raises cost for older models
After cutting U.S. vehicle prices four times this year, Tesla raised the cost overnight on its slow-selling more expensive models.
The hike could be an effort to appease investors, who dumped shares of Tesla on Thursday after earnings and profit margins dropped due to previous price cuts.
The Austin, Texas, company added $2,500 to all four versions of the Models S and X, increasing their prices from 2.4% to 2.9%.
The lowest-price Model S now starts at $87,490, while the base price for the X is $97,490, according to Tesla’s website early Friday. Neither is eligible for the U.S. government’s $7,500 electric vehicle tax credit because they exceed sticker price limits.
Only 10 electric and plug-in hybrid cars will qualify for the full tax credit in the U.S. out of 90 available EV options on the market.
Prices of the company’s top-selling Model Y small SUV and Model 3 small sedan remained the same after being lowered earlier this week.
Tesla shares closed Thursday down nearly 10% after CEO Elon Musk said it would sacrifice profit margins in order to boost sales. On Wednesday Tesla reported first-quarter net income that fell 24% from a year ago, and operating profit margins that dropped from 19.2% in the first quarter of last year to 11.4% last quarter.
In trading early Friday the stock was flat.
The price increases come at a strange time for Tesla because global sales of the aging Model X large SUV and Model S big sedan fell nearly 38% in the first quarter to 10,695.
Shares in all electric vehicle makers have been under significant pressure this week. Tesla shares are down 12.4% for the week, while startups Rivian, Lucid and Lordstown Motors all lost about 10% of their value. Fisker dropped 14% for the week and Nio fell 12%, while Nikola dropped almost 8%.
