Tesla hikes prices in U.S., China and other markets after multiple cuts

Tesla hiked the price of several cars in key markets, including the U.S. and China, after a number of cuts this year.

Elon Musk’s electric vehicle company increased the price of vehicles including its Model 3 and Model Y in the U.S., China, Canada, and Japan.

In China, Tesla’s Model 3 now costs 231,900 Chinese yuan ($33,549), up from the previous price of 229,900 yuan, according to the company’s website Tuesday. The Model Y is also 2,000 yuan higher at 263,900 yuan, while the long-range and performance editions of the car are also priced 2,000 yuan higher.

In the U.S., the Model 3 and Model Y series of cars now cost $250 more. The Model 3 starts at $40,240, while the Model Y is priced at $47,240.

Tesla also hiked the price of some of its cars in Japan and Canada.

Despite the rises, the price of Tesla’s vehicles remains lower than at the start of the year due to several rounds of price cuts across the world, including in China and Europe, in an effort to stoke demand.

Tesla CEO Musk signaled in April on an earnings call that the automaker will be targeting larger volumes of sales versus higher margins but said he expects the company “over time will be able to generate significant profit through autonomy.”

Tesla adjusts its prices frequently to react to market conditions.

Other electric carmakers are watching Tesla’s pricing strategy closely, with some analysts suggesting the U.S. firm has sparked a price war with its cuts.

Not all automakers are being drawn into price cuts, however. William Li, CEO of Chinese upstart Nio, told CNBC last month that the company will keep its prices high.

Tesla’s price reductions this year have come amid an uncertain macroeconomic environment and concerns that consumers will cut back on large ticket purchases like cars. But Tesla is also facing heightened competition from traditional automakers like Ford in the U.S., and EV companies like Nio, Xpeng and Warren Buffet-backed BYD in China.