Tesla raised the prices of certain Model Y vehicles in the US by $1,000 on Friday, according to its website. The company increased the price of its Model Y rear-wheel drive and long-range vehicles to $43,990 and $48,990, respectively, while the prices of the Model Y Performance variant and other models remained unchanged. In February, Tesla temporarily reduced the prices of some of its Model Y cars in the US until February 29, nearly a month after it cut prices across Europe and China. CEO Elon Musk addressed the manufacturing challenges in a recent post on X from Tesla saying prices would go up in March.
He said, “This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal.” Over the past few months, US buyers have preferred hybrid cars over pure electric vehicles to avoid higher ownership costs and some models losing their federal tax credits over battery sourcing requirements under the Inflation Reduction Act.
In January, Tesla warned of “notably lower” sales growth this year as it focuses on the production of its next-generation electric vehicle, code-named “Redwood.” The latest price hike might come as a relief to Tesla’s margins, which have already been impacted by a price war with rivals that began over a year ago. Tesla shares are down 18.75% so far this year.