Tesla raises car prices by thousands as raw material costs soar

Tesla, the largest electric car manufacturer in the world, has increased the price of its cars by thousands of dollars within the last two weeks as raw materials like steel have skyrocketed .

16 March 2022 Wednesday 11:26
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Tesla raises car prices by thousands as raw material costs soar

According to company websites, the listed prices for several new Tesla models increased Tuesday compared to March 1. Elon Musk, Tesla CEO, hinted at the reason prices are rising earlier by saying in a Tweet Sunday that there is "significant recent inflation pressure in raw material and logistics."

The Model X by Tesla now costs $114,000. This is a more than $10,000 increase. The Model S's price has risen $5,000 to $99990, while the Model 3 Performance price has risen $3,000 to $61,990, and the Model Y price has risen $4,000 to $62,990.

According to Credit Suisse analyst Dan Levy in a research note, Tesla's most recent price increases have been between 3% and 5.5% in the U.S. Although it is not clear when the price increases occurred, Reuters reported Tesla having raised its prices twice within a matter of days. Tesla didn't respond to a request for comment regarding Tuesday's price hikes.

As inflation drives up prices for everything, from food and rent to clothes and appliances, the cost of cars is on the rise.

According to the U.S. Labor Department, consumer prices grew by 7.9% in February -- the highest rate of inflation since 1982. The Labor Department reports that the average price of a new car has increased by 12% compared to a year ago. According to Kelley Blue Book, a typical new car costs $46,404.

The price of used cars rose by 41% over the past year as more people bought them than there was supply. Edmunds estimates that the average price for a used car would be around $29,000.

After seeing the price of aluminum, nickel, and palladium rise in recent weeks, experts in the automotive industry predicted that new vehicle prices would increase soon. This was as a result of Russia's invasion of Ukraine on February 24, 2014. S&P Global Mobility analysts told CBS MoneyWatch that they anticipate the Mercedes EQS's price to rise as high as $11,000 because of higher metal prices.

For making essential parts of your car, aluminum, palladium, and condensers, as well as catalytic converters and air conditioner condensers, you can use nickel, aluminum, and palladium. For example, the batteries in Tesla's Model Y are made from nickel.

As more U.S. companies and European corporations cut ties to Russian metal producers, the Russia-Ukraine conflict is driving metal prices higher.


 

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