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The price update happened due to a significant increase in prices for raw materials as well as other tensions within the automotive industry. Back in April, Elon Musk stated that they had some issues with the supply chain. Now, the company has the same problems.
The EV giant Tesla Inc (NYSE: TSLA) is seeing an increase in its vehicle price. In particular, its Model 3 and Model Y became more expensive, with the removal of lumbar support on the passenger side in Model Y at the same time. While some are criticizing Tesla for this movement, Elon Musk explains that the price increase is just a result of “supply chain pressure” in the auto industry globally.
In response to a tweet by the user @Ryanth3nerd, Musk wrote:
Moving lumbar was removed only in front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used.
Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially.
— Elon Musk (@elonmusk) May 31, 2021
Tesla Vehicle Price Changes
So far this year, Tesla has made changes to its vehicle price already three times. Back in February, the company cut the prices of both the Model 3 and Model Y lineups, with the cheapest vehicle starting just under $37,000. Further, in March, Tesla reviewed its price policy and increased the price of its cars. Now the Model 3 Standard Range Plus, which was the cheapest vehicle the company offered before, cost $37,490. Model S, Model Y, and Model X prices remained mostly unchanged.
Now, Tesla has changed the prices again. According to the report by the Electrek website, Tesla’s Model 3 Standard Range Plus and Model 3 Long Range AWD both added $500 to their price. Tesla Model Y Long Range AWD increased in price by the same amount as well. This update is due to a significant increase in prices for raw materials as well as other tensions within the automotive industry. Back in April, Elon Musk stated that they had some issues with the supply chain. Now, the company has the same problems.
The supply chain issue is not the only problem Tesla has to handle. As we have reported earlier, Tesla delayed the production at its new Berlin Gigafactory because of battery issues.
Tesla (TSLA) Stock Performance
Following the news, Tesla stock rose in the early trading. Yesterday, it closed at $625.22, but today it has added 0.73% to $629.77. Tesla’s market cap is $602.29 billion. In the past 12 months, TSLA stock has jumped by 248%. However, year-to-date, it is 11.40% down.
According to many analysts, Tesla’s stock price has a lot to gain ahead. For example, Colin Rusch, an analyst at Oppenheimer who has the most optimistic vision on Wall Street, set a price target of $1,036 in 2021 for Tesla. Robert W. Baird predicts $736.00 for Tesla shares. The Goldman Sachs Group (NYSE: GS) analysts set their price target at $860.00. There are currently 11 sell ratings, 12 hold ratings, and 12 buy ratings for the stock. The average consensus rating for Tesla stock given by Wall Street is ‘hold’.