EV giant Tesla Inc TSLA has raised prices on certain variants of its Model Y SUV in the U.S. by $1000, while also offering incentives on new vehicle purchases in its second-biggest market in China.
In The U.S.: According to Tesla’s U.S. website, the Model Y rear-wheel drive (RWD) is now priced $1000 higher at $43,990 and the Model Y Long Range at $48,990. The price of the Performance variant of the vehicle, however, remains unchanged at $52,490.
Tesla cut prices on both the Model Y RWD and the Long Range by $1000 in February and warned that prices might be raised by $1000 or more by March 1.
CEO Elon Musk then explained the temporary price cut as an attempt to increase vehicle deliveries despite the seasonal lull in demand.
"Since most people don’t love to buy cars in the middle of winter, Tesla is offering a $1000 incentive to do so," Musk said. While factories need continuous production for efficiency, consumer demand is seasonal, Musk said, adding that it is the ‘essential quandary' of manufacturing.
In China: Meanwhile, in Tesla’s second-biggest market after the U.S., Tesla is offering incentives on new vehicle purchases.
On Friday, the company said in a Weibo poster that it is offering a discount of up to 34,600 yuan (about $4,806) on inventory Model 3 and Y vehicles until the end of March.
Tesla is faced with intense competition from EV makers such as BYD in the Chinese marketplace. In the last quarter of 2023, BYD took over Tesla in battery electric vehicle (BEV) sales by selling 526,000 BEVs, surpassing Tesla’s global delivery count of 485,000. However, unlike Tesla which sells only BEVs, BYD also makes hybrids.
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