Elon Musk blames rising Tesla prices on raw material costs

Last week Tesla raised the value of the Model three by $2,000 to $39,990 for the bottom mannequin, in response to a comparability of its website on the Wayback Machine web archive. Tesla additionally raised the value of the Model Y SUV by $5,000 to $51,990.

When a Tesla fan questioned the value will increase on Twitter, Musk responded that the value will increase have been past its management.

“Prices increasing due to major supply chain price pressure industrywide,” he tweeted. “Raw materials especially.”

Musk informed buyers in April that the scarcity of laptop chips was a “huge problem.” Tesla did not build any of its more expensive models, the Model S and Model X, in the course of the first quarter because it directed the chips it needed to the Model three and Model Y. It has but to renew deliveries of both automotive, although it’s promising as soon as once more that deliveries should resume soon for the Model S.

Computer chips are usually not the one raw material seeing shortages and value will increase. Prices for lithium, a key material utilized in EV batteries, have greater than doubled in buying and selling markets. Cobalt, one other key material for batteries, can be sharply greater although it has retreated from a excessive earlier this 12 months.

What Tesla is paying for these raw supplies underneath its provider contracts is unknown. The similar is true for metals used elsewhere within the automotive, resembling metal, aluminum and copper, which have additionally seen in prices traded in public markets rising. Even tires are reported to be in brief provide all through the business.

Tesla plans to extend manufacturing by greater than 50% this 12 months, and thus is rising its demand for batteries by the identical quantity. And conventional automakers are also ramping up production of EVs and thus EV batteries.

Tesla is attempting to manage costs the place it could actually. The firm just lately eliminated options within the Model three and Model Y, resembling lumbar help for the entrance passenger seat. Musk stated that Tesla information reveals that the characteristic isn’t getting used fairly often, and thus it was not definitely worth the further price or weight.

Tesla has not but raised the prices of its two most costly vehicles, the Model S and Model X SUV.

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