Tesla raises prices of some Model Y vehicles in US

FILE PHOTO: Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul/Pool via REUTERS/File Photo

(Reuters) -Tesla on Friday raised prices of certain Model Y vehicles in the United States by $1,000, according to its website.

The company raised the price of its Model Y rear-wheel drive and long-range vehicles to $43,990 and $48,990, respectively.

Prices of the Model Y Performance variant and other models remained unchanged, according to the website.

In February, Tesla temporarily cut prices of some of its Model Y cars in the U.S. until Feb. 29, nearly a month after it slashed prices across Europe and China.

“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” CEO Elon Musk said last month while replying to a post on X from Tesla saying prices would go up in March.

Buyers in the United States have opted for hybrid cars over pure electric vehicles over the past few months 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 rise might come as a relief to Tesla’s margins, already hurt by a price war with rivals that started more than a year ago.

Tesla shares are down 18.75% so far this year.

(Reporting by Kanjyik Ghosh and Akash Sriram in Bengaluru; Editing by Varun H K and Eileen Soreng)