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The cost of special metals used in cars has soared, including aluminum that is used in the bodywork, palladium used in catalytic converters, and nickel and lithium that power electric vehicle (EV) batteries.
American electric car manufacturing giant Tesla Inc (NASDAQ: TSLA) has increased the prices of its products, the second time in a week it will be making such a move on grounds that the inflationary pressure is mounting. Tesla’s vocal Chief Executive Officer (CEO) Elon Musk shared on Twitter that the company is seeing soaring inflation in the cost of raw materials being used in its auto production.
Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics
— Elon Musk (@elonmusk) March 14, 2022
The tech world has been recording significant strain with respect to semiconductors or chip supplies for some time now, drawing on the strain brought about by the coronavirus pandemic. While it seems that a number of tech companies have started figuring a way out from the semiconductor shortage, the over 2 weeks old geopolitical conflict in Eastern Europe between Ukraine and Russia has introduced a strain to the global supply chain industry, a trend that is now impacting Tesla’s business in more ways than one.
The cost of special metals used in cars has soared, including aluminum that is used in the bodywork, palladium used in catalytic converters, and nickel and lithium that power electric vehicle (EV) batteries. Despite the fact that these materials are not currently under any form of sanctions or embargo, the logistics surrounding their acquisition have accrued a lot of significant costs for industry players.
Defining the Tesla Auto-Prices Hike
Going by the circumstances on the ground, the Electric Vehicle giant’s cheapest electric car, Model 3, now starts at about $47,000 with the company notably hiking the price by at least $1,000 across all of its long-range vehicles equipped with long-range battery packs in the previous week.
As summarized by electrek, the Model 3 Dual Motor All-Wheel Drive got an increase in price by $2,500 to $54,500, but as previously mentioned, it also received a $1,000 increase just last week. The more advanced Model 3 Performance saw exactly a $3,000 hike in price to $61,990.
Other Tesla car brands including the Model Y recorded a $2,000 price addition to $62,990. Riding down the most advanced Tesla vehicles including the Model S now starts at $99,990, a product that saw as much as a $5,000 price increment. Tesla’s products with the most addition in price are the electric SUV which saw a price increase of $10,000 pushing it to start selling at $114,990.
It is yet unknown whether these price hikes are temporary or permanent, but whatever comes, the growing inflationary pressures are what is expected to seep into the broader industry with other car manufacturers particularly those with a vested interest in churning out electric vehicles in the near term.