Elon Musk's Tesla made headlines on Friday as it announced a $1,000 price increase on certain Model Y vehicles sold in the U.S., as per the company's official website.

Specifically, the price hike affects the Model Y rear-wheel drive and long-range versions, which are now listed at $43,990 and $48,990, respectively. However, prices for the Model Y Performance variant and other models remained unchanged as of Friday.

This move comes after Tesla temporarily slashed prices on some Model Y cars in the U.S. back in February, with the reductions lasting until the end of February. Elon Musk addressed the challenges of balancing production continuity with fluctuating consumer demand, emphasizing the seasonal nature of the automotive market.

Image Source : Google.com

In the U.S., consumers have shown a preference for hybrid vehicles over electric vehicles in recent months, driven by factors such as higher ownership costs and changes in federal tax credit eligibility. Tesla, in January, forecasted slower sales growth for the year ahead, citing a focus on ramping up production of its next-generation electric vehicle, internally known as "Redwood."

The latest price adjustment by Tesla aims to improve the company's profit margins, which have been under pressure due to intense competition and a pricing war within the EV industry. Notably, China's BYD emerged as the world's top EV maker in the last quarter of 2023, posing a competitive threat to Tesla. BYD's entry into the European market and potential expansion into the U.S. market further intensifies competition for Tesla.

Tesla's stock performance reflects the challenges and competition it faces, with shares declining by over 18% in 2024 while showing modest growth of around 4.5% over the past year.