Tesla Hikes Prices Of Its Cars In U.S., Keeps Prices Steady In China

Tesla Inc. showed signs of divergent strategies in the world's two biggest automotive markets, raising prices to boost profit margins in the United States while keeping prices steady in China and hoping to grow sales there, Eva Mathews, Nivedita Balu and Hyunjoo Jin reported for Reuters.

Photo Insert: Tesla kept prices steady in China, the world's biggest EV market, and the country in which local competitors thrive

Tesla raised prices for the most affordable versions of Model 3 and Model Y about a dozen times this year in the US, according to data tracked by Reuters. At the same time, Tesla recently introduced an affordable Model Y version in China, where it refrained from price cuts.

The company posted record vehicle deliveries in the second quarter, and the price increases in North America boosted quarterly profits to a record.

But in China, the world's biggest electric vehicle (EV) market, Tesla faces competition from local rivals and problems that include product recalls, high-profile protests by consumers and pressure from regulators.

Bernstein analyst Toni Sacconaghi said the introduction of the lower-priced Model Y in China "may make sustained margin improvement difficult" for Tesla and raises questions about "the health of Chinese demand."

A study by Bernstein analysts found Tesla owners in China were less enthusiastic and had lower repurchase intentions than owners in the US and Europe. Tesla raised prices for Model Y Long Range at least six times in the United States this year, bumping by $5,500 to $53,990.

In China, the world's most valuable carmaker raised prices of the Model Y SUV and Model 3 sedan only once this year.

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