Tesla raises prices for all its models as a result of persistent global supply chain issues and increasing raw materials costs. The prices are increasing in the US. Model Y long-range is at $65,990 from its earlier price of $62,990. The change comes after certain long-range model deliveries were delayed last month.
That amounts to around a 5% hike, as the costs of raw materials are also rising. From aluminum to lithium, all are high in demand and the batteries prices have increased. Automakers are struggling to keep up because of the industry-wide shortage. While the rising in prices has been going on for some time now. It seems to be continuing as the issues continue. A certain increase in price might not have affected sales, but it is questionable when the rising prices are going at a much higher rate.
It is said that the price hike represents the fourth one in the US this year. Credit Suisse said, “While some concerned price hikes will destroy demand, for now, Tesla remains supply-constrained,” Furthermore, earlier Tesla CEO Elon Musk said that lithium prices are increasing, which mostly affected the vehicle prices as well. Said that “a limiting factor” to EV growth is currently lithium. Musk encouraged people to get into the lithium business.
Other EV makers
Rival Rivian Automotive Inc has also raised prices by more than $10,000 for new orders of its base model. Rivian Chief Financial Officer Claire McDonough said on Thursday during Deutsche Bank’s Global Auto Industry Conference that customers were opting for the most high-end models despite the price increases.
“(That’s) leverage as we think about the world of inflation, and the pricing headroom that we believe we have for our vehicles,” McDonough said. Several automakers are expected to deliver electric cars to customers for the first time in their race to catch up with Tesla amid growing demand.
Musk, the world’s richest person, has warned about the risk of a recession in recent weeks. He said earlier this month he had a “super bad feeling” about the economy and that Tesla needed to cut 10% of jobs. Musk, who is in the process of buying Twitter for $44 billion, is expected to address the social media company’s employees later on Thursday. Also, Bird has recently laid off various employees to focus on increasing its profits. Tesla China canceled a hiring process recently. Various changes are occurring within the business as well. Rising prices only add up to such changes.
