For the second time in weeks, Tesla Inc. raised prices on its vehicles following a historic commodity surge.
Bloomberg reports the cheapest Model 3 in the US is $46,990. In a note to clients, Credit Suisse analyst Dan Levy said Tesla raised prices on all its vehicles between 3% to 5% this week. This is the second time in weeks that Tesla has raised prices (see: here).
The increase comes after a historic surge in commodity prices following Russia’s invasion of Ukraine. Western sanctions isolate the commodity-rich Russia from the rest of the world, threatening metal supplies. Bloomberg’s industrial metals index surged to record highs.
Also, the most significant weekly change in industrial metals just occurred and kicked off the first round of Tesla price hikes last week.
There’s no word on which metal(s) is impacting Tesla the most, but if we had to guess it’s probably metals for its batteries that have skyrocketed in price, such as nickel.
“Those new price increases today come just as the price of nickel is surging due to the crisis in Ukraine leading to embargoes and sanctions on Russia, the world’s third-biggest producer of nickel – a material critical to high-energy-density battery cells found in some electric vehicles,” Electrek said last week.
On Sunday, Tesla’s Elon Musk, clearly frustrated with the commodity shock, tweeted, “Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistic.”
Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics
— Elon Musk (@elonmusk) March 14, 2022
To mitigate costs, Tesla has opted to equip some base Model 3s with iron-phosphate battery cells that don’t require nickel to keep costs low. However, such a move appears not to be working, and electric cars can certainly not escape today’s out-of-control inflationary environment.
Mush has promised an affordable version of the Model 3, but the likelihood of that happening during a commodity shock is zero.
via patriotpowerline
