Tesla has raised the price of its new premium Model Y in China amid a sharp drop in sales this year and is offering limited-time, interest-free financing for the basic version.

The US electric vehicle giant hiked the price of the new Model Y long range all-wheel drive version by CNY10,000 (USD1,382) to CNY313,500 (USD43,340) on its Chinese website today. The price of the basic rear-wheel-drive version was unchanged at CNY263,500 (USD36,430).

Tesla has historically raised prices during sales slumps to create market expectations of further price increases, pushing hesitant buyers to act quickly, analysts said.

The latest increase follows one in January, when the Austin-based company released a revamped version of the Model Y in its first major upgrade since its 2019 debut. The prices of the premium and basic versions were raised from CNY290,900 (USD40,220) and CNY249,900 (USD34,550), respectively.

But the revamped model has struggled to win over Chinese consumers. Sales slumped 11.5 percent in January from a year earlier to 63,238 vehicles, according to data from the China Passenger Car Association. They worsened last month, plunging 49 percent to just 30,688.

Tesla China is now also offering two financing plans for the rear-wheel-drive Model Y until April 30. These include a three-year interest-free loan and a five-year ultra-low-interest loan at an annual rate of 1.94 percent, compared with the standard rate of 4.73 percent.

Since last year, Tesla has frequently rolled out limited-time promotional financing deals in China. Just last month, it introduced a five-year interest-free loan for its entire Model 3 lineup, along with a CNY8,000 (USD1,106) car insurance subsidy, available until March 31.