Detroit, April 21 (U.S.): After slashing prices on U.S. cars four times this year, Tesla raised the cost overnight on its more expensive, slow-selling models.
According to the Associated Press (AP), the rally may have been an attempt to appease investors, who dumped Tesla shares on Thursday after earnings and profit margins fell due to previous price cuts.
The Austin, Texas manufacturer added $2,500 to all four versions of the Model S and X, increasing their prices from 2.4% to 2.9%.
The lowest-priced Model S now starts at $87,490, while the base price for the X is $97,490, according to Tesla’s website early Friday. Both are ineligible for the US government’s $7,500 electric vehicle tax credit because they exceed sticker price limits.
Prices for the top-selling Model Y small SUV and Model 3 small sedan remained unchanged after being slashed earlier this week.
Tesla shares closed down nearly 10% Thursday after CEO Elon Musk said it would sacrifice profit margins in order to boost sales. On Wednesday, Tesla reported that first-quarter net income fell 24% from a year ago, and operating profit margins fell from 19.2% in the first quarter of last year to 11.4% in the most recent quarter.
The stock was flat in early trading Friday.
The price increases come at an odd time for Tesla because global sales of the Model X large SUV and Model S large sedan fell nearly 38% in the first quarter, to 10,695.
Stocks across all electric vehicle manufacturers have come under a lot of pressure this week. Tesla shares fell 12.4% for the week, while startups Rivian, Lucid, and Lordstown Motors all lost about 10% of their value. Fisker stock is down 14% for the week, Nio is down 12%, and Nikola is down about 8%.
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