Elon Musk blamed Tesla's dramatic price increases on the cost pressure from both its suppliers and logistics.
Tesla CEO Elon Musk gestures during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.
The Tesla CEO and founder explained why its electric vehicles had to dramatically increase their prices in the past six to 12 months.
Elon Musk and Tesla Price Increases
The billionaire tech entrepreneur, Musk, spoke during the first quarter of the 2022 earnings call of his giant EV maker, Tesla.
During its earnings call to Tesla investors, the tech CEO admitted that the automaker was forced to increase its prices in the past months, as per a news story by Tech Crunch.
As such, here at Tech Times, we have covered several Tesla price changes since last year, skyrocketing its base price tag to a staggering $46,990. The increase in pricing of its EVs also made it to the headlines of other news outlets.
That said, the price increases of Tesla vehicles, including the Tesla Model S and Model Y, have been a piece of familiar news to some.
Tesla CEO Elon Musk arrives at federal court, April 4, 2019 in New York City.
Despite that, Musk offers that they "absolutely want to make EVs as affordable as possible."
However, the tech exec has to face the reality of the staggering inflation these days, which Musk said is roughly around a 40 to 50-year high already. The Tesla boss went on to note that these figures fail to actually describe how the current situation is going.
Elon Musk Blames Supplier for Tesla Price Increases
The billionaire entrepreneur further revealed that there have been cases where the suppliers of the electric automaker have jacked up their prices dramatically by about 20-30 percent.
That said, Musk admits that Tesla is facing "a lot of cost pressure" from its suppliers since last year.
The Tesla founder also said during the investor earnings call that in turn "it may seem like maybe we're being unreasonable about increasing the prices of our vehicles."
CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party in Austin, Texas, on April 7, 2022.
But Musk told Tesla investors that the price changes have given the EV maker profitability despite the cost pressure that it is facing from its suppliers in the past months.
According to a recent report by Reuters, the EV maker boasts a 60 percent delivery growth in 2022.
The Tesla Chief Financial Officer, Zach Kirkhorn, also clarified that even if the current prices of the global raw materials drastically jack-up, the EV maker is not directly affected by it, at least immediately.
The cost increase only starts applying once their contact with their suppliers reaches its renewal period.
Once the contract has already expired, the giant automaker starts negotiating its prices again, which could affect the overall production costs of its EVs.
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Written by Teejay Boris
