Tesla Hikes Prices in China for its Premium Offerings, Including S & X Models

Tesla raised prices in China for its premium models, following a price increase this week in the cost of its top-selling vehicles Model 3 and Model Y. This move marks a reversal from the company after implementing several rounds of aggressive cuts earlier this year.

Increasing Prices for Premium Models

All variants of the Model S sedan and Model X sports vehicles will be part of the company's price increase in China, which is the company's largest overseas market. According to Bloomberg's report, both vehicles were raised 19,000 yuan or $2,750 and will now start at 808,900 yuan ($117,060) and 898,900 yuan ($130,084).

Tweaking the prices of its higher-end vehicles is much lesser impactful to Tesla's bottom line as Chief Executive Officer Elon Musk described the two premium models are of minor importance to the company's future. He also said in March that the company would prioritize sales growth ahead of margins, hence why this increase was implemented.

Global Price Increase

Aside from China, other markets also experienced a price increase in the last few days, including the United States, Japan, and Canada. This move from the company has reversed the series of recent price cuts that pushed the company's profit margin to one of its lowest in the last three years.

For its best-selling vehicle, CNN reported that Tesla has increased the prices of its Model Y and Model 3 Sedan in different regions, In China, both vehicles increased by 2,000 yuan ($289), which will now start at 263,900 yuan ($38,179) and 231,900 yuan ($33,550) respectively.

In the United States, the company added a price increase Tesla Model Y, which now starts at $47,340, and the Model 3 now starts at $40,240. Meanwhile, Japan received a $269 increase, and Canada with $222 for both of its top-selling vehicles.

While the rise marks a good start for the company after several setbacks, CNBC reported that the price of Tesla's vehicles remains lower than at the start of the year as the company implemented rounds of price cuts across the world to stoke demand, including in China and Europe.

Tesla usually adjusts its offerings' prices frequently since the year started in response to the market conditions. Last month, Musk signaled during the earnings call that the company will be targeting a larger volume of sales, rather than higher margins.

He expects the company "over time will be able to generate significant profit through autonomy." After this statement, Reuters reported that the company's website raised the starting price point for its base models in the United States, which now led to a global price increase.