Tesla Raises Prices For Second Time In Days
Second price rise for Tesla electric vehicles in the space of a week, as inflationary pressure continues amidst Ukraine war
Tesla has raised the prices of its electric vehicles (EVs) for the second time in under a week, amid inflationary pressures impacting the global economy.
Last week CEO Elon Musk warned that Tesla and SpaceX was seeing “significant” inflationary pressure affecting raw materials and logistics.
He linked to an article saying that Russia’s invasion of Ukraine has sent commodity prices to their highest level since 2008, he added in a Twitter message, “And we are not alone.”
What are your thoughts about probable inflation rate over next few years?
— Elona Musk (@elonmusk) March 13, 2022
Inflationary pressure
The conflict has seen soaring prices of metals used in cars, including steel and aluminium, palladium for catalytic converters and high-grade nickel for electric vehicle batteries.
Western countries have not yet imposed sanctions on metals, but many shippers and auto-parts suppliers are shunning Russian goods.
Car makers are already struggling with a shortage in microprocessors and higher energy prices.
Rising prices for housing, food and fuel drove the US consumer inflation index to its steepest jump in four decades, fuelling expectations of a Federal Reserve interest-rate increase.
Tesla, which has a diversified supply chain, has bought “millions of euros worth of aluminum” from Russian aluminium giant Rusal, CNBC reported on Monday, citing internal documents.
Tesla bought Rusal aluminum for casting parts at its new vehicle assembly plant outside of Berlin for the Tesla Model Y, among other things, CNBC was reported as saying.
As a consequence Tesla last week raised US prices of its Model Y SUV Model 3 Long Range sedan by $1,000 (£767) each and prices of some Model 3 and Model Y vehicles in China by 10,000 yuan (£1,209).
Second price rise
Now less than a week later, Tesla has raised its prices in China and the United States for the second time.
On Tuesday Tesla raised prices for all its models in the United States by 5 to 10 percent, its website showed. In China, it raised prices of some China-made Model 3 and Model Y products by about 5 percent, Reuters reported.
As Elon Musk noted above, Tesla is not alone.
Rival electric vehicle maker Rivian has recently been sued by a shareholder, after the firm did a quick u-turn over price increases for certain models.
At the start of this month California-based Rivian had raised the base price of its quad-motor R1S SUV and R1T pickup truck, by $12,000 and $14,500, respectively.
Justifying the price at the time, Jiten Behl, Rivian’s chief growth officer, told The Verge that the company faced “inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips).”
After an outcry, Rivian allowed customers with orders who cancelled their pre-order after the price hike, can now re-instate the order at the originally-agreed price. New orders however will be charged at the new price.
Tesla finally received a conditional go-ahead for its 5 billion euro ($5.5 billion) German gigafactory earlier this month, after months of delay.
