Tesla recently announced its plans to raise the price of its U.S. Model Y in April, which appears to be an attempt to combat failing earnings estimates.
The company also plans to hike the price of the European Model Y before the end of March.
Tesla’s Model Y Prices Set to Increase
The Model Y is a state-of-the-art electric vehicle offered by Tesla, the company founded by Elon Musk.
CNBC reported that the company recently made an announcement on its website, claiming, “Prices will increase by $1,000 for all Model Y trims on April 1.”
European Model Y Set for Price Increase
Tesla’s Model Y vehicles in Europe will also experience a price hike even sooner.
According to the company, Model Y vehicles in Europe will increase by around $2,100 by March 22.
Model Y Experiences a $1,000 Price Hike
The new higher prices come less than a month after Tesla announced it would be increasing the cost of Model Y rear-wheel drive vehicles.
In March, the long-range Teslas saw an increase of $1,000 to $43,990 and $48,990, per Reuters.
Tesla Increases the Price of Model Y After Cuts Last Year
The increase in Model Y vehicles in the US and across Europe comes after consumers experienced a period of reduced prices in 2023.
According to experts, last year’s slashed prices aimed to increase sales momentum.
Musk Revealed Price Increase Was Forthcoming
Musk alluded to a forthcoming price increase when asked about potential price increases in February on X.
“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” he said.
Analysts Agree Tesla’s Strategy Isn’t Helping the Company
Various analysts have been following Tesla’s pricing strategy, which they claim may hurt the EV company.
They also suggest that the recent hike in Model Y prices doesn’t necessarily indicate an increase in demand.
Tesla Demand Is Low
Troy Teslike, a respected social media expert in Tesla data, claims the increase in price has nothing to do with demand.
In March, he shared a tweet saying that the U.S. price increase is “not because of too much demand.”
Customers Are Encouraged to Buy Now
“Based on the latest data, inventory is currently high,” Teslike posted.
He continued, “Tesla’s message is to buy now before the increase.”
Tesla Struggles to Meet Expectations
The price increases witnessed this year may be directly related to the company’s lackluster financial performance.
Since the so-called price war began over a year ago with competitors in the EV market, Tesla’s margins have suffered a severe blow.
Musk’s Company Foresaw a Slow Year
It appears Tesla was aware of a potentially slow 2024. In January, the company warned investors of “notably lower” sales growth in the coming year.
This comes as the EV manufacturer aims to focus its attention on its next-generation vehicle, known only by its codename “Redwood.”
Tesla Stock Continues to Struggle
TSLA shares have continued to struggle in 2024. On March 14, they hit 162.50, a low not experienced since 2023.
Overall, the stock price was down nearly 14% in March. Investors are hopeful Tesla’s next-generation “Redwood” will restore the EV manufacturer to its place at the top of the food chain.
