Tesla raises prices by $2,000 after cutting them last year as expert insists ‘the worst is in the past’ for Elon Musk’s EV giant

TESLA lowered the prices of the Model S and Model X by $2,000 to attract buyers, but a drop in sales restored the original price.

Musk posted that the near-constant price fluctuations reflect market demand.

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In April of last year, potential electric vehicle buyers were shocked to see Model S and Model X web pages listing the vehicles for $2,000 less than their previous price.

At the time, Musk commented that it was to attract buyers to his brand.

The cut led other automakers to lower their prices to remain competitive, such as Hyundai and Ford.

Some Tesla owners who recently purchased a Model S or Model X criticized the move as they paid full retail price for their EV, only for prices to drop shortly after.

Fast forward to July 2024, just over a year after the original price cut, prices for both models have returned to their original price.

So the Model S costs $74,990, and the Model X now starts at $79,990.

However, as Business Insider reportedThis isn’t the first time Musk has raised prices, as they “change frequently to match production and demand,” he wrote on Twitter. X.

In April, the price of the Model Y was increased by $1,000, only to reduce prices again at the end of the same month.

All models except for the Cybertruck.

Tesla sales and deliveries fell nearly five percent in the second quarter of this year, causing some experts to speculate whether the drop had something to do with restoring prices.

The company has also faced its fair share of recalls, with four recalls opened on the Cybertruck in June.

Deliveries of the Cybertruck will begin in November 2023, although it was initially announced in 2019.

Furthermore, more than two million vehicles were recalled in February this year when the instrument panel text was too difficult to read.

Wedbush analyst Dan Ives said the first two quarters may have been difficult for the EV pioneer — but there are things the company can look forward to.

“In short, the worst is in the rearview mirror for Tesla, as we believe the EV demand story is starting to come back,” he said earlier this month.

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Ives noted that the promise of an increase in demand may have been a factor in the price change, as it would increase the electric vehicle maker’s profit.

Readers of Electrek Coverage of the increase generated more than 130 comments, many with mixed feelings.

A reader wrote that both models should have a reduced price.

“The costs of developing and manufacturing these vehicles should have already been amortized,” they wrote.

“These vehicles must be priced to be eligible for the $7,500 tax credit. Getting the paint and interior color you want shouldn’t go over the price limit and cause you to lose the tax credit. People are delaying the purchase of these vehicles because they don’t want to lose the tax credit.”

Why aren’t people buying EVs?

In January, many electric vehicle manufacturers reported sluggish demand. Rueters said there are a few valid reasons for the slowdown in demand:

1. High initial costs. Many automakers, including Tesla, Hyundai and Ford, have carried out “price cuts” on their flagship electric vehicles to attract new buyers, even as demand remains sluggish.
2. Higher insurance costs. Some insurers cite fire risks, high battery replacement costs and greater vehicle weight as reasons for higher premiums.
3. Loaded anxiety. A large percentage of people remain afraid of finding themselves in a situation where they will not be able to charge if they run out of battery due to a lack of infrastructure.
4. Range anxiety. In many cases, EVs still do not have the range and infrastructure of gas-powered vehicles.
5. Poor performance at extreme temperatures. Reduced range in extremely hot or cold climates makes potential buyers wary.

Source: Reuters

Another reader felt sorry for those who bought the Model S or X for the high price.

“I had lost track of how much Tesla had cut the base price of the Model S,” they wrote.

“Customers who financed an S two or three years ago must be boiling when they start thinking about trading in such a submerged car.”

Someone commented that the models weren’t worth the money, scaled down or not.

“The Models S and X are old,” the comment said.

“They are outperformed on every metric by competitors. They may claim ridiculously large range numbers, but the actual real-world numbers are nowhere near their ‘EPA’ ratings. Ride quality, NVH, characteristicsand just the basic quality is not even remotely on par with their price tags.”