Musk Raises Tesla Model Y Prices to Combat Falling Earnings Estimates

By: Ben Campbell | Published: Mar 26, 2024

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.

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A Tesla Model Y pictured parked at the side of a road

Source: Wikimedia

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.”

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European Model Y Set for Price Increase

Tesla’s Model Y vehicles in Europe will also experience a price hike even sooner.

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A photograph of a white Tesla Model Y in Germany

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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.

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An electric vehicle pictured as it charges in a carpark

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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.

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A Tesla Model Y is pictured driving along a road

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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.

Elon Musk pictured dressed in a suit during a photoshoot

Source: Wikimedia

“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” he said.

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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.

A woman in a yellow shirt is pictured looking over data on a computer screen

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They also suggest that the recent hike in Model Y prices doesn’t necessarily indicate an increase in demand.

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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.

A man is pictured looking over paperwork while he sits at his desk

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In March, he shared a tweet saying that the U.S. price increase is “not because of too much demand.”

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Customers Are Encouraged to Buy Now

“Based on the latest data, inventory is currently high,” Teslike posted.

Elon Musk is pictured standing beside a Tesla vehicle

Source: Wikimedia

He continued, “Tesla’s message is to buy now before the increase.”

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Tesla Struggles to Meet Expectations

The price increases witnessed this year may be directly related to the company’s lackluster financial performance.

A photograph of several Tesla vehicles outside of a Tesla factory

Source: Wikimedia

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.

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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.

Elon Musk pictured with a straight face during an event

Source: Wikimedia

This comes as the EV manufacturer aims to focus its attention on its next-generation vehicle, known only by its codename “Redwood.”

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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.

A woman holds her hand on her head as she observes a drop in stock prices

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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.

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