Tesla is raising prices on its entire EV lineup, a move that comes days after CEO Elon Musk warned the firm was under “significant” inflationary pressure given the rising cost of key commodities following Russia’s invasion of Ukraine.
According to Tesla’s website review, the price increase is between 5% and 10% over previous levels. The company pays higher prices for key raw materials such as aluminum and nickel.
For example, the cheapest Tesla car available, the rear-wheel drive Model 3, is now $46,990, up from the old price of $44,990. Tesla’s most expensive car model, the Model X Tri Moto, now costs $138,990, up from $126,490.
The increase was the second of the month for Tesla. Last week, the company warned of higher prices for longer-range versions of Model 3 and Model Y vehicles.
Earlier this week, Musk spoke about the inflationary issues Tesla and SpaceX were facing on Twitter, noting that the companies were “not alone” as they grapple with rising commodity prices during the Russia-Ukraine war.
“Tesla and SpaceX have recently faced significant inflationary pressures in the area of raw materials and logistics.” Musk tweeted.
Elon Musk has warned that Tesla is “not alone” in facing much higher prices for key commodities.
In a note to clients earlier this week, analysts at Wells Fargo said the price of nickel is up 130% this year alone. Nickel is a key component in batteries used in electric vehicles. Other commodities such as aluminium, cobalt and lithium have also risen significantly, jumping 16% to 88% this year.
The Russian-Ukrainian war is just another setback in the supply chain for Tesla and other automakers that have been fighting for months to keep key components safe as the global economy recovers from the COVID-19 pandemic. Last summer, Musk told analysts that Tesla was reprogramming software to use more affordable computer chips.
CNBC reported that Tesla has strong supply chain ties with Russia, noting that the company has purchased millions of euros worth of aluminum from Russia’s Rusal.
Meanwhile, Musk and his firm SpaceX have played an active role helping the people of Ukraine during the war with Russia. The billionaire provided Ukrainians with Starlink internet over fears they could lose access as the invasion escalates.
Musk also got into a verbal altercation with senior Russian officials, including Russian President Vladimir Putin, whom he challenged to “single combat” in a tongue-in-cheek Twitter post this week.
With mail wires