DETROIT (AP) – After cutting vehicle prices in the United States (US) four times this year, Tesla raised the cost overnight on its slow-selling more expensive models.
The hike could be an effort to appease investors, who dumped shares of Tesla on Thursday after its earnings and profit margins dropped due to previous price cuts.
Investors also expressed concerns on Friday in a letter to Tesla’s board that Chief Executive Officer Elon Musk is too distracted running his other companies, including Twitter and SpaceX, to effectively lead the electric car and solar panel company.
The Austin, Texas, company added USD2,500 to all four versions of the Models S and X, increasing their prices by 2.4 per cent to 2.9 per cent.
The lowest-price Model S now starts at USD87,490, while the base price for the X is USD97,490, according to Tesla’s website early on Friday.
Neither is eligible for the US government’s USD7,500 electric vehicle tax credit because they exceed sticker price limits.
Prices of the company’s top-selling Model Y small SUV and Model 3 small sedan remained the same after being lowered earlier this week.
Tesla shares closed on Thursday down nearly 10 per cent after Musk said the company would sacrifice profit margins in order to boost sales.
On Wednesday Tesla reported first-quarter net income that fell 24 per cent from a year ago, and operating profit margins that dropped from 19.2 per cent in the first quarter of last year to 11.4 per cent last quarter. The stock closed Friday at USD165.08, up 1.3 per cent.
The price increases come at a strange time for Tesla because global sales of the aging Model X large SUV and Model S big sedan fell nearly 38 per cent in the first quarter to 10,695.
