In a decision that flies in the face of falling EV demand, Tesla (NASDAQ: TSLA) announced it is raising prices on its Model Y by $1,000 on April 1. The decision affects every version of the crossover.
The Model Y price starts at $36,490 (after a US tax credit) and can go much higher with self-driving features, AWD, and an extended-range battery. Tesla says the Model Y can go 279 miles on a single charge, which is mediocre by the standards of most EVs sold in America.
The Model Y was introduced almost six years ago, part of one of Tesla’s biggest problems. It has not introduced new models at the pace many car companies do.
The Model Y is extremely fast. It moves its 4,386 pounds from zero to 60 in 3.6 seconds.
Tesla has been part of the trend by EV makers to drop prices, and in some cases, they have fallen sharply. Part is due to low demand, and part is due to growing competition. Some in the industry blame Tesla for starting these cuts to maintain its 50% plus market share in the US.
Price cuts have also been blamed for a drop in Tesla’s profit margins. In the fourth quarter of last year, Tesla’s auto revenue rose 3% to $25.2 billion, but its profit measurement, Adjusted EBITDA, dropped 27% to $4 billion.
Margins are among the reasons Tesla’s stock has dropped 34% this year to $163. Additionally, CEO Elon Musk told investors not to expect 2024 revenue to rise much. No one was surprised. EV sales are down because of issues like driving range and charger availability. Tesla’s stock price is not up as much as some people think.Â
Has Tesla seen an increase in demand for the Model Y recently? Tesla didn’t say when it raised the price, which is among the company’s habits.
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