Tesla raises prices for Model 3 and other cars in China while the yuan is weaker



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FILE PHOTO: The Tesla logo is photographed on a car during the 2019 E-Rallye Baltica electric car in Bauska, Latvia, on July 23, 2019. REUTERS / Ints Kalnins / Photo File

SHANGHAI (Reuters) – US electric vehicle manufacturer Tesla Inc. (TSLA.O) had raised prices for some vehicles in China, with the yuan trading at its lowest level in more than a decade.

The starting price for the Model X sport utility vehicle (SUV) now stands at 809,900 yuan ($ 114,186), up from 790,900 yuan previously, according to Tesla's Chinese website on Friday.

Its long-range two-engine variants of mainstream model 3 cars now cost 439,900 yuan, compared with 429,900 yuan previously.

Trade friction between the United States and China and a tariff war between the two countries prompted Tesla, which currently imports all cars sold in China, to adjust prices several times over the last year.

The latest rise comes as China has allowed the yuan to weaken against the US dollar earlier this month, increasing the cost of imports and pushing Washington to qualify China as a currency manipulator. Beijing is strongly opposed to etiquette.

Some people familiar with the subject told Reuters earlier this week that Tesla would increase its prices because of the monetary uncertainty and could do it again in December if Chinese tariffs on American cars came into effect.

Tesla is currently building its first overseas factory in Shanghai, which should allow the company to minimize the effects of the trade war. Production is expected to begin by the end of the year and Tesla said it should be able to build 3,000 model 3 vehicles a week in its initial phases.

Although Tesla does not disclose its sales by country, the consultancy LMC Automotive estimates to have sold 23,678 vehicles in China in the first seven months of this year, including 17,451 model 3 cars.

Report by Yilei Sun to SHANGHAI and Se Young Lee to BEIJING; Additional report by Brenda Goh in SHANGHAI; Edited by Stephen Coates and Himani Sarkar

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