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Tesla hikes US prices days after sixth price cut this year

Published 04/20/2023, 11:44 PM
Updated 04/21/2023, 05:01 PM
© Reuters. FILE PHOTO: A Tesla logo is seen on a wheel rim during the media day for the Shanghai auto show in Shanghai, China April 16, 2019. REUTERS/Aly Song/File Photo
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(Reuters) -Tesla Inc raised the U.S. prices for its Model S and X premium electric vehicles on Thursday, according to its website, although they are still 20% lower than at the start of the year after a slew of price cuts to drum up demand.

The move came after Tesla (NASDAQ:TSLA) shares slumped nearly 10% on Thursday after the automaker missed its margin target, hit by aggressive price cuts. On Friday, Tesla shares rebounded to close 1.3% higher at $165.08%.

Tesla's Model S Plaid and Model X Plaid - the performance versions of those models - are now priced at $107,490, up from $104,990 earlier, the company's website showed.

The price of the Model X is now $97,490, roughly 2.6% higher than previously, while the price of the Model S was increased around 2.9% to $87,490.

However, Tesla is giving three years of free access to its Superchargers to people who buy the premium models by June 30.

The prices of all four models are still 16% to 23% less expensive than at the start of the year.

Tesla had cut prices on both versions of the Model S and Model X by $5,000 earlier this month, days after reporting that deliveries of these vehicles slumped by 38% in January to March.

Tesla has been slashing prices globally since January, including six times in the United States as of Tuesday. It is seeking to drive volume, especially for its mass-market cars, the Model Y crossover and the Model 3 sedan.

Tesla Chief Executive Elon Musk on Wednesday doubled down on the price war he started at the end of last year, signalling the EV maker would prioritize sales growth ahead of profit in a weak economy.

© Reuters. FILE PHOTO: A view of the Tesla service centre in Singapore July 16, 2022. REUTERS/Chen Lin/File Photo

The company posted its lowest quarterly gross margin in two years, missing market estimates, as it slashed prices aggressively in markets including the United States and China to spur demand and fend off rising competition.

Ford Motor (NYSE:F) Co's chief executive, Jim Farley, said on Thursday that Tesla was pioneering a more dynamic way of pricing electric vehicles that other manufacturers would have to follow.

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