Tesla to charge more for cars in United States as inflation bites

Tesla raised the prices of all its cars in the United States due to persistent global supply-chain issues and rising raw material costs.

After delaying U.S. deliveries for some long-range models by upto a month, the electric carmaker raised its Model Y long range price to US$65990 from $62,990, its site showed.

The price increase of 5 percent comes as raw materials for lithium and aluminum are more expensive, while automakers have difficulty sourcing chips due to a shortage in the industry.

Credit Suisse saidThe price hike is in some cases the fourth in the United States by 2022. The brokerage said that although some fear price hikes could reduce demand, Tesla remains supply constrained for the time being. said.

Elon Musk, Tesla Chief Executive Officer, has previously saidLithium is a cost-increasing and “limiting factor” for EV growth, which encourages carmakers to get into the business.

Rival Rivian Automotive raised the prices of its base model by more than US$10,000.

Claire McDonough, Chief Financial Officer at Rivian saidDeutsche Bank’s Global Auto Industry Conference was held on Thursday. Customers were choosing the most high-end models, despite increasing prices.

McDonough said, “That’s leverage when we think about inflation and the pricing headroom which we believe our vehicles have.” said.

Many automakers will deliver electric cars to customers in an effort to catch up to Tesla amid growing demand.

Musk, the richest person in the world, has warned of the dangers of a recession in recent days. He saidHe had a “super bad feeling about the economy” earlier in the month and Tesla needed to reduce 10% of its jobs. 

Musk, who is currently in the process to buy Twitter for US$44billion, will address employees of the social media company later Thursday.

Tesla shares fell by 9 percent on Thursday.

(Reporting by Maria Ponnezhath, Nivedita Balu, and Maria Ponnezhath, Bengaluru. Tina Bellon in Austin. Texas. Editing by Rashmi Aich. Arun Koyyur. Richard Chang.