Tesla has rescinded a discount on the performance edition of its Shanghai-made Model Y sport-utility vehicle (SUV), just 10 weeks after the US carmaker slashed the price to lure mainland consumers.

The increase comes after Tesla reported a 32.8 per cent month-on-month sales decline on the mainland in September.

The car is priced at 363,900 yuan (US$49,735) as of Friday, up 14,000 yuan from Thursday, Tesla China announced on its website. The company had slashed the price by 14,000 yuan to 349,900 yuan on August 14.

“The price change reflects that Tesla is shifting its focus to profitability from sales volume in China,” said Gao Shen, an independent analyst in Shanghai. “The price cut will ease pressure on some Chinese rivals such as Nio and Xpeng.”

Tesla did not give reasons for the price hike and made no further price changes.

The company adjusts the prices of its locally built vehicles regularly based on production costs, Grace Tao, Tesla’s head of communications and government affairs in China, said on Weibo in January.

Tesla’s Shanghai Gigafactory delivered 43,507 units to mainland customers in September, down 32.8 per cent from a month earlier, the China Passenger Car Association (CPCA) said on October 11.

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At present, Tesla remains the leader in China’s premium electric vehicle (EV) segment, trailed by three top domestic start-ups – Li Auto, Nio and Xpeng – all of which assemble intelligent EVs featuring autonomous driving technology, sophisticated digital cockpits and high-performance batteries.

Beijing-based Li Auto, Tesla’s nearest rival in mainland China, handed a record 36,060 vehicles to customers in September, up 3.3 per cent from the previous month.

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Tesla fired the first salvo in an EV price war in China last October. It then followed up with another round of discounts in January, prompting dozens of rival EV makers and conventional manufacturers to slash prices to retain market share.

But the discounts failed to increase sales because budget-conscious consumers held back, hoping for even deeper price cuts.

Tesla, led by US billionaire Elon Musk, began raising prices in May amid a release of pent-up demand.

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China is the world’s largest EV market, accounting for 60 per cent of the global total, and is expected to maintain strong growth momentum in the fourth quarter of 2023 thanks to new launches and discounts, analysts said.

A sales boom between October and December would be enough for the country’s EV industry to achieve a lofty full-year growth target of 8.5 million EVs sold, according to three sales managers with car dealers in Shanghai. The CPCA set the goal after a slow start in the first quarter.

Strong players such as BYD and Li Auto are likely to rewrite their monthly delivery records, they said.

China’s EV makers, including manufacturers of petrol-guzzlers that are racing to migrate to EVs, delivered 4.44 million EVs to mainland Chinese customers from January to August, a 36 per cent year-on-year increase, CPCA data shows.