Tesla Done With Price Cuts? Report Says EV Maker Could Soon Hike Model Y Prices In China

Tesla, Inc. TSLA has aggressively reduced prices of its electric vehicles this year, while also offering lavish discounts. The pricing action did not go down well with investors and the stock was stuck in a trading range as a result. A new report says Tesla could be getting ready to roll back the price cuts.

What Happened: The Elon Musk-led company could increase the price of Model Y prices in October, Car News China reported, citing local media outlets. The potential price raises were apparently shared by Tesla’s local sales person.

The company may stop the scheme of offering a 3,500-yuan ($480) referral incentive to Model Y buyers this week and then begin to nudge prices higher, the report said. The hike could be only 8,000 yuan to 10,000 yuan ($1,095-$1,370), it added.

The company might also opt to pull the plug on the the rear-wheel drive version altogether, the report said. The Model Y was Tesla’s best-selling EV in China and it has all the new features Tesla added to its Model 3 refresh, the salesperson reportedly said. The Model 3 price will remain unchanged at 259,900 yuan, he added.

See Also: Tesla Set For Electric Start As Stock Surges 6% Premarket: What’s Going On?

Why It’s Important: If Tesla were to confirm the rumored price hike, it could send a positive message to investors about margin and demand. It could also raise hopes of the company expanding the price increases to other geographies.

Commenting on the news, Tesla investor Gary Black said, “This would be very bullish for $TSLA if China M-Y prices increased, given small current price gap between M-3 and M-Y (~$500 US).”

He also found the report interesting as it comes just three weeks before the quarter end.

In premarket trading, Tesla stock rose 6.19% to $263.88, according to Benzinga Pro data.

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