With the purchase discounts offered by expiring at the end of the month, the upcoming price hike means that the actual cost of purchasing a Model Y will go up by as much as RMB 23,000, according to local media.

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Tesla (NASDAQ: TSLA) is reportedly about to raise the price of its hot-selling Model Y crossover in China, a rare move in the ongoing price war.

The US electric vehicle (EV) maker will raise prices in China on April 1, with the Model Y's price to be hiked by RMB 5,000 yuan ($700), local media outlet Cailian said in a report today, citing insiders at Tesla China.

Tesla's current RMB 8,000 insurance subsidy and up to RMB 10,000 in paid paint reductions for stock vehicles will expire on March 31, the report noted.

The upcoming price hike means that the actual cost for consumers to buy a Model Y will rise by as much as RMB 23,000, according to the report.

Tesla has a factory in Shanghai that produces the Model 3 and Model Y. After the last price cut on January 12, the Model 3 now starts at RMB 245,900 and the Model Y at RMB 258,900 in China.

The EV maker announced on March 1 that Chinese customers can enjoy a discount of up to RMB 34,600 if they buy and take delivery of a Model 3 or Model Y inventory car by the end of March.

This includes an RMB 8,000 insurance subsidy, discounts on paid car paint, and a discounted loan rate.

On March 16, Tesla announced in North America and Europe that the Model Y would increase in price by $1,000 and €2,000 starting April 1, respectively.

The reported impending price hike appears to be Tesla China's follow-through on overseas price hike moves, but is rare as the price war continues in China.

At the same time, the early release of the information seems aimed at prompting potential customers still waiting on the sidelines to place orders, as it has done previously.

On January 12, Tesla cut the prices of both versions of the Model 3 in China by as much as nearly 6 percent amid fierce price competition, and two of the three versions of the Model Y by as much as 3 percent.

The Model 3 is available in two versions in China -- an entry-level rear-wheel drive version and a dual-motor, all-wheel drive, long-range version -- with current starting prices of RMB 245,900 and RMB 285,900, respectively.

The Model Y is available in three versions in China -- the basic rear-wheel drive version, the dual-motor, all-wheel drive Model Y Long Range version, and the dual-motor, all-wheel drive Model Y Performance version, with current starting prices of RMB 258,900, RMB 299,900, and RMB 363, 900, respectively.

On February 19, 2024, the second working day after the Chinese New Year holiday, (HKG: 1211, OTCMKTS: BYDDY) rolled out lower-priced Glory Editions for the Qin Plus and the Chaser 05, marking the launch of its latest round of major model updates.

BYD has already updated a number of its models, all of which have seen significant price reductions. While it said the move is aimed at gaining more share from traditional gasoline vehicles, it's also putting pressure on other EV makers.

So far this year, a number of car makers, including Nio (NYSE: NIO), Xpeng (NYSE: XPEV), Li Auto (NASDAQ: LI), Polestar (NASDAQ: PSNY), Neta, and IM Motors, have stepped in to compete on pricing in different ways.

($1 = RMB 7.1992)

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