Carmaker Tesla has announced that it plans to hike its UK prices by five percent next year. The company said that the decision was taken to mitigate the effects of "currency fluctuations." The decision was reportedly conveyed to the UK showrooms earlier this week. The increase in the price will be effective from January 1, 2017.

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The news comes on the heels of reports of other manufacturers and retailers increasing their prices after Brexit. The pound has declined by more than 15 percent against the dollar since the Brexit vote. The currency's weakness has pushed up the costs of imported goods.

Tesla main operation is based in California. The company also has a manufacturing base in Amsterdam. It also operates a distribution center in the Netherlands. However, the company plans to expand its footprints in Europe. Earlier this year, Tesla CEO Elon Musk said that the company plans to set up a "Giga factory" and an automated manufacturing research center in Europe. However, he did not provide any timeline for these projects.

With this increment, the price of a fully decked Model S saloon with top range battery is likely to be at £160,912, up from £153,250. The cheapest version of the Model S will be priced at £61,845 instead of the current price of £58,900.

While some other automakers have hiked their prices in recent times, the five percent increase announced by Tesla is steeper than others. On an average, the increase by other auto companies ranged between 0.9 percent and 2.5 percent.

The price increase will not apply to customers who have paid a deposit for their cars. It will also not affect used cars. The UK has emerged as one of the biggest markets for Tesla in Europe. During the first half of this year, the company sold 1,263 Model S cars in the country.