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Tesla blames inflation, cost pressure from suppliers for increased car prices – TechCrunch

Tesla has raised prices for its vehicles as it anticipates cost pressures from suppliers and logistics over the next six to 12 months, the automaker said on Wednesday during its Earnings call for the first quarter of 2022.

“We really want to make electric vehicles as affordable as possible. It’s been very difficult to keep inflation at a 40- or 50-year high, and I think the official numbers underestimate the true magnitude of inflation,” said Tesla CEO Elon Musk. “In some cases we are seeing suppliers requesting 20-30% cost increases on parts from last year through the end of this year. So there is a lot of cost pressure there.”

The news comes as Tesla has also said it expects an ongoing supply chain crisis limit production capacity in its factories, which will continue for the rest of the year.

During the first quarter The automaker increased the MSRP of its battery-electric models about 5% to 10%. The automaker says the market will bear it as demand continues to outstrip supply.

“It may seem like we’re being inappropriate in raising the prices of our vehicles given that we’ve had record profitability this quarter,” Musk said during Wednesday’s investor briefing, “but the vehicle waiting list is quite long.” , and some of the vehicles that are being ordered are on the waiting list into next year.”

Tesla said it is not directly affected by rising raw material costs, but that cost pressures could increase once its current contracts with suppliers expire.

“Our contracts directly reflect movement and commodity or commodity prices,” Tesla CFO Zach Kirkhorn said during the briefing. “But when those contracts expire, we have to renegotiate them, so in some cases there can be delays.”

The automaker says its prices are unlikely to rise any further in the long term.

“We hope we don’t have to raise prices any further,” Musk said. “Current pricing, in our view, anticipates likely cost growth. And if it actually happens, we expect slightly reduced prices.”

“But we don’t control the macroeconomic environment,” he added. “Governments continue to print huge amounts of money, and unless there are significant increases in lithium mining and refining and other commodities, so that everyone is competing for a limited amount of commodities, then obviously that’s going to push prices to high levels.”

Musk said Tesla is unwilling to slow down the sustainable energy transition, even in the face of such constraints, and the company is working with existing suppliers to determine how to accelerate the production of raw materials as quickly as possible.

Tesla blames inflation, cost pressure from suppliers for increased car prices – TechCrunch Source link Tesla blames inflation, cost pressure from suppliers for increased car prices – TechCrunch

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