Tesla has again raised prices for all of their electric vehicle models in the United States. Supply chain problems and rising raw material prices are the reasons Tesla’s car prices are rising again.
Tesla raised the price of the Model Y by 5% to $65,990 from $62,990. The increase was forced to be done because the cost of raw materials such as aluminum to lithium which is used for the production of cars and batteries soared.
In addition to raw material constraints, Tesla has also had to struggle for chips and other supplies due to industry-wide shortages.
Elon Musk has previously said that lithium is responsible for rising costs and being a “limiting factor” for electric vehicle growth, prompting automakers to get into the lithium business.
Tesla rival Rivian Automotive Inc has also raised prices by more than $10,000 for new orders for its base model.
Rivian Chief Financial Officer Claire McDonough told the Deutsche Bank Global Automotive Industry Conference that customers are choosing the most advanced models despite rising prices.
Several automakers are expected to ship electric cars to customers for the first time in their race to catch up with Tesla amid growing demand.
Musk, the world’s richest man, has warned about the risk of a recession in recent weeks. Earlier this month he said he had bad feelings about the economy and Tesla needed to cut jobs by 10%.
According to Reuters, Tesla shares were down about 9% on Thursday.
