The company raises prices on China’s best-selling premium models.
It follows this week’s price increases by Tesla for the Model 3 and Model Y in China and other markets, including the United States.
The price increases follow price reductions made by Tesla in recent months to boost demand.
On an earnings call in April, Tesla CEO Elon Musk hinted that the automaker would be focusing on increasing sales volumes rather than higher margins, but he added that he anticipates the business “over time will be able to generate significant profit through autonomy.”
Tesla frequently adjusts its price to react to market conditions.
To compete in China’s luxury electric car market, Tesla looks to be keeping the price of its Model S and Model X higher there.
However, the Chinese market is becoming more competitive due to both established competitors like BYD and newcomers like Nio. However, Tesla doesn’t have many significant rivals in China in the pricing range that the Model S and Model X fall under.
The decision, combined with price increases on premium models last month, represents a partial turnabout from earlier in the year’s dramatic price cuts that caused the company to record its lowest gross margin in almost three years.
Elon Musk, however, stated that the two premium models are of little relevance to Tesla’s future, making a price adjustment for more expensive vehicles less significant for Tesla’s bottom line than a Model 3 or Y cost modification.