Inflation hits the EV industry as Tesla raises prices
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Inflationary pressures are hitting everywhere, from the production line to consumers' pockets. For the second time in less than a week, Tesla (NASDAQ:TSLA) is raising prices in the U.S. and China to cope with the costs of raw materials. Prices have surged in recent month, from aluminum and palladium used in bodywork and catalytic converters to nickel and lithium that power EV batteries. TSLA -0.8% to $760 premarket.
Quote: "Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics. And we are not alone," Elon Musk tweeted earlier this week, before challenging Vladimir Putin to a duel over Ukraine.
The latest increases saw Tesla (TSLA) raise prices for all its American (and Chinese) models by 5%-10%. Its cheapest vehicle, the Model 3 Rear-Wheel-Drive, even went up $2,000 to $46,990. Last week, the company raised prices of its U.S. Model Y SUVs and Model 3 Long Range sedans and some China-made Model 3 and Model Y vehicles.
Supply chain complications: CNBC reported on Monday that Tesla (TSLA) bought "millions of euros worth of aluminum" from Rusal, the Russian metals giant founded by sanctioned oligarch Oleg Deripask. The transactions go back to 2020, though there's no indication that Rusal aluminum has been used in U.S. production. Its willingness to work with Russian suppliers is also not unusual. Almost all of the world's biggest automakers buy from at least one tier-1 supplier in Russia, according to global supply chain research firm Interos.