assembler Tesla announced a price increase for its Model S and X models in the US after a nearly 10 percent drop in shares. According to the company, the increase in the cost of sedans and SUVs was caused by markdowns earlier this year, which jeopardized profitability.

The cost of each high-end model variant has been adjusted by $2,500, which represents a 2-3% increase in the final price. The Model S and X started selling at $87,490 and $97,490 respectively.

Despite the growth, the cars are still cheaper than at the end of the first quarter, when price cuts cut profits. Notably, the move comes two days after Tesla cut prices for its much larger Model Y SUV and Model 3 sedan for the second time this month.

Shares fell nearly 10% on Thursday, the biggest drop since Jan. 3, after CEO Elon Musk suggested the company would continue cutting prices to meet demand. However, before the start of normal trading today, shares rose by 1.8%.

“We believe that aiming for more volumes and larger fleets is the right choice in this case, not less volume and higher margins.“, Musk told analysts on Wednesday.

drop in sales

While price changes for its high-end vehicles are less important to Tesla’s bottom line than price adjustments for the Model 3 or Y, the company sold just 10,695 Model S and X vehicles in the first quarter, up about 2.5%. supplies. Musk has already said the two vehicles are “of secondary importance” to Tesla’s future, but the company recently started exporting them again from its California plant.

With the price move, Tesla hopes to reverse earlier losses and maintain brand growth in an automotive market that is increasingly being challenged by traditional companies and new entrants.

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Source: Bloomberg.

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