Tesla isn't done raising prices

• Tesla raised Model S and Model X prices by $2,000 after a year of price cuts.
• The price hike follows a 4.8% drop in second-quarter sales compared to last year.
• Elon Musk has said Tesla prices must fluctuate frequently to "match production with demand."

After over a year of dropping prices of various models to boost sales, Tesla appears to be changing tack.

The EV giant has increased Model S and Model X prices by $2,000 — essentially undoing the price cuts of the same amount in April.

The Tesla Model S now starts at $74,990, and the Model X retails for $79,990. Their Plaid variants are now priced at $89,990 for Model S and $94,990 for Model X.

The price increase for Tesla's most expensive vehicles, aside from the Cybertruck, comes as the EV maker battles cooling demand, with Q2 sales down 4.8 % year over year.

Tesla's prices fluctuate frequently, and this isn't the first price hike this year in its lineup. On April 1, the price of Tesla's Model Y was hiked by $1,000, only for the company to slash its price — along with all other models sans the Cybertruck — by $2,000 later that month.

At the time, CEO Elon Musk wrote on X that "prices must change frequently in order to match production with demand."

But broadly speaking, this most recent price uptick indicates the company may be more ready to break from lowering prices — and sacrificing some gross margin — to maintain ground in the EV competition. The company spent the last year cutting prices by roughly 25%, Business Insider previously reported.

While more people continue to buy electric vehicles, the growth in sales has slowed and competition has been fierce. Chinese automaker BYD briefly surpassed Tesla in January as the world's top EV seller.

Despite Tesla's rocky start to the year , the company seems to have turned a corner. While deliveries were still down in the second quarter, they weren't as bad as Wall Street feared.

"In a nutshell, the worst is in the rearview mirror for Tesla as we believe the EV demand story is starting to return," Wedbush analyst Dan Ives wrote in a note to clients earlier this month.

With some encouraging results, Tesla looks ready to test the waters of demand going into the summer — and eke out some additional profit per vehicle.