(By Balaseshan) Electric vehicles manufacturer Tesla Motors Inc. (TSLA) said it is increasing for the first time in almost four years the price of its award-winning car of the year, the Model S, to $59,900 before federal tax credits. The previous price was $57,400.
The price increase will be for new reservations starting January 1, 2013. These new reservations will begin deliveries several months later, which means the new prices will actually go into effect over four years after Tesla originally set base pricing for the Model S.
In Canada, the base price of the Model S will increase C$2,600 and implementation will be the same as in the U.S.
[Related -Tesla, Apple Among Companies Investing Big Bucks in America! So Why Aren't Investors?]
Tesla had originally unveiled the Model S in March 2009 with a base price of $57,400 ($49,900 after federal tax credits). Today, the base price of the model still remains at $57,400, the same price set over three and a half years ago.
During this same period of time most automotive companies have had at least three price increases and general inflation (CPI) has gone up 8.75 percent. A straight 8.75 percent CPI increase would now yield a base price for Model S of $62,400, an increase of $5,000. But Tesla said it is increasing prices only half that amount.
"We believe it is a positive reflection on our design process and disciplined, long-term planning that enabled us to increase prices for the first time in four years at only half the rate of inflation," said George Blankenship, vice president of worldwide sales and ownership experience.
[Related -Tesla Motors' (TSLA): Forget the Naysayers; Buy the Next Great American Icon Now]
The company said this price increase will not be applicable to any reservation made by the end of day on December 31, 2012, as long as customers finalize their order within a reasonable, predefined time-frame after being invited to configure their Model S.
Model S is the world's first premium sedan built from the ground up as an electric vehicle. Setting the bar for electric driving range, Model S offers 40 kWh, 60 kWh and 85 kWh battery options. All three batteries use automotive-grade lithium-ion cells arranged for optimal energy density, thermal management, and safety.
TSLA is trading up 0.24 percent at $33.31 on Thursday. The stock has been trading between $22.64 and $39.95 for the past 52 weeks.