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Tesla raises car prices in China amid trade war - Electrek

Reuters 

By Sharma

(Reuters) - Inc has raised prices on its Model X and S cars by more than $20,000 in China, automotive website Electrek reported on Monday, making it one of the first U.S. carmakers to hike prices in the wake of rising trade tensions.

slapped tariffs on U.S. on Friday in response to Donald Trump's move to impose duties on $34 billion worth of Chinese goods.

has been banking heavily on China, the world's largest automotive market, to boost sales of its electric cars and has plans to build a factory in the country.

In May, the company slashed up to $14,000 off its Model X in after said it planned to reduce import duties to 15 percent from 25 percent for most vehicles from July 1.

contributed about 17 percent to Tesla's total revenue in 2017 and the an estimated 15,000 cars a year to the country.

"Raising prices is going to hurt sales, but money losing has to raise prices because they can't afford to fully absorb to the higher costs of tariff," CFRA research said.

"Considering they claim to be capacity constrained, they should be able to shift sales elsewhere."

Prices of the Model S and Model X were increased over the weekend by 150,000 yuan to 250,000 yuan ($22,600-$37,600) depending on the version, Electrek reported.

Tesla is visiting and this week, reported on Monday, citing people familiar with the matter. The report added that details of the trip were not immediately available.

Tesla did not respond to requests for comment.

The company's stock was up marginally at $311.74 after pairing early most of its gains.

Tesla has been grappling to reverse production shortfalls for its cheaper Model 3 electric sedans, confronting reports of crashes involving its vehicles and facing increased skepticism over its finances.

"I wouldn't wonder if Tesla is going to hike the prices in general, because the money is getting shorter and shorter. Cutting 9% of the jobs was a similar sign. I can't imagine, that Tesla can be in the black before 2020," said Frank Schwope, an with

In order to keep pumping out the Model 3, the performance of which is essential to put Tesla on a path to profitability, the company tapped workers from other departments, disrupting production of the Model S and X lines.

Tesla said last week it now expects to boost production to 6,000 Model 3s per week by late August, signaling confidence about resolving technical and assembly issues that have plagued the company for months.

Other automakers could follow Tesla in raising prices, Levy said.

Ford Motor Co, however, said on Thursday it would not hike prices on its imported cars for now, crimping its profit margins on cars imported to China.

(Reporting by Sharma and in Bengaluru; Editing by Anil D'Silva)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Mon, July 09 2018. 22:37 IST
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