Tesla Raises Prices

By Douglas A. McIntyre Published Mar 16, 7:04AM EDT

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Tesla Raises Prices — © Public Domain/Wikimedia Commons

In a decision that flies in the face of falling EV demand, Tesla (NASDAQ: TSLA) announced it is raising prices on its Model Y by $1,000 on April 1. The decision affects every version of the crossover.

The Model Y price starts at $36,490 (after a US tax credit) and can go much higher with self-driving features, AWD, and an extended-range battery. Tesla says the Model Y can go 279 miles on a single charge, which is mediocre by the standards of most EVs sold in America.

The Model Y was introduced almost six years ago, part of one of Tesla’s biggest problems. It has not introduced new models at the pace many car companies do.

The Model Y is extremely fast. It moves its 4,386 pounds from zero to 60 in 3.6 seconds.

Tesla has been part of the trend by EV makers to drop prices, and in some cases, they have fallen sharply. Part is due to low demand, and part is due to growing competition. Some in the industry blame Tesla for starting these cuts to maintain its 50% plus market share in the US.

Price cuts have also been blamed for a drop in Tesla’s profit margins. In the fourth quarter of last year, Tesla’s auto revenue rose 3% to $25.2 billion, but its profit measurement, Adjusted EBITDA, dropped 27% to $4 billion.

Margins are among the reasons Tesla’s stock has dropped 34% this year to $163. Additionally, CEO Elon Musk told investors not to expect 2024 revenue to rise much. No one was surprised. EV sales are down because of issues like driving range and charger availability. Tesla’s stock price is not up as much as some people think.

Has Tesla seen an increase in demand for the Model Y recently? Tesla didn’t say when it raised the price, which is among the company’s habits.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.