During its first-quarter earnings call on Wednesday, the company said that it has raised prices on its vehicles as it anticipates cost pressures from suppliers over the next six to 12 months.
We want to make EV affordable. It has been very difficult with inflation at a 40 or 50-year high, and I think the official numbers actually understate the true magnitude of inflation. There is a lot of cost pressure there.
As a result of the supply chain crisis, production capacities at its factories will be limited through the rest of the year.
The MSRP on the battery-electric models was increased between 5% and 10% during the first quarter. As demand continues to outstrip supply, the market will bear it.
It may seem like we are being unreasonable about increasing the prices of our vehicles, given that we had record profitability this quarter, Musk said during the briefing with investors Wednesday.
When its current contracts with suppliers end, cost pressures could mount, but it is not immediately affected by the rising cost of raw materials.
The contracts reflect movement and commodity prices, according to the CFO of the company.
The prices likely won't continue to go up over the long-term.
The current pricing is anticipating the likely growth of costs. We estimate slightly reduced prices if it happens.
He said that we don't control the macroeconomic environments.
Musk said that the company is working with existing suppliers to determine how to accelerate the production of raw materials as quickly as possible, even though it is unwilling to slow the transition to sustainable energy.
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