According to SpaceX founder Elon Musk, the aerospace company and Tesla, the electric carmaker, are facing huge inflationary pressure in raw materials and logistics.
When he asked about the inflation rate outlook on Twitter, Musk said that companies “are not alone”. He also retweeted an article about the Ukraine-Russia conflict. Which said that this conflict raised commodity prices to the highest levels since 2008.
The prices of metals used in cars have all gone up. From aluminum in the bodywork to palladium in catalytic converters. And surely the high-grade nickel in electric vehicle batteries. The customers are likely the ones who will foot the bill.
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Some shippers and auto-parts suppliers have already started to avoid Russian goods. That’s put more pressure on carmakers who already reeling from higher energy prices and chip shortages.
Since the beginning of this year, Tesla has lost about 25% of the value of its shares. On Friday, the company shares closed 5% lower at $795.35.
Last week, Tesla raised the prices of its Model 3 Long Range sedans, and its U.S. Model Y SUVs by $1,000 each. Even some China-made Model 3 and Model Y vehicles have been raised by 10,000 yuan ($1,582.40).
Moreover, Toyota Motor, Japan’s automaker, said that it would scale back domestic production up to 20% for April-June. In an attempt from it to ease the strain on suppliers who struggling with shortages of chips and many other parts.