The company in May slashed up to $14,000 off its Model X in China after Beijing announced major tariff cuts for imported automobiles.
China planned to reduce import tariffs to 15 percent from 25 percent for most vehicles from July 1.
China contributed about 17 percent to Tesla’s total revenue in 2017 and the electric car maker ships an estimated 15,000 cars a year to the country.
“Raising the prices is going to hurt sales, but money losing Tesla has to raise prices because they can’t afford to fully absorb to the higher costs of tariff,” CFRA research analyst Efraim Levy said.
“Considering they claim to be capacity constrained, they should be able to shift sales else where.”
“I wouldn’t wonder if Tesla is going to hike the prices in general, because the money is getting shorter and shorter. Cutting nine percent of the jobs was a similar sign. I can’t imagine, that Tesla can be in the black before 2020,” said Frank Schwope, an analyst with NORD/LB.
Tesla did not immediately respond to a request for comment by Reuters.
There will be other automakers who are going to raise prices, Levy said.
Reporting by Vibhuti Sharma and Sonam Rai.