This year, Tesla executed a series of price hikes, to the point that the costs of its entry-level cars, the Model 3 and Model Y, are now approaching those of its flagship vehicles, the Model S from a few years ago. Elon Musk recently said, though, that if inflation “clams down,” Tesla may be able to lower the price of its cars. When questioned on Twitter whether Tesla has any intentions to cut car pricing that was revised to handle the pandemic and the supply chain problem, Musk brought up the topic.
Musk tweeted, “We can cut automobile pricing if inflation slows down.” The recent price hikes for Tesla have been fairly significant. A fully-loaded Tesla Model Y has surpassed the $87,000 threshold as of last month’s price increase if destination and doc costs are taken into account. This is fairly absurd considering that the Model Y is one of the company’s most reasonably priced vehicles.
Tesla’s pricing hikes are fairly reasonable, as stated in a Reuters article. The cost of raw materials has increased for everything from lithium to the aluminum that Tesla uses for the batteries in its cars. The industry-wide chip scarcity and the growing cost of raw materials have dealt a serious blow to all automakers.
Musk has expressed his views on the American economy in a rather transparent manner. He has warned of a coming recession and expressed his “very awful feeling” about the state of the economy.
But the CEO of Tesla’s worries might have a point. In June, US consumer prices increased by 9.1% to a level not seen in almost 41 years, maintaining excessive costs for basic commodities like food and fuel. Companies like Tesla have been impacted by these economic headwinds, and some of them have chosen to reduce spending and change their employment strategies.