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Technology Elon Musk blames ‘supply chain price pressure’ for Tesla’s increasing prices

13:05  02 june  2021
13:05  02 june  2021 Source:   theverge.com

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Tesla CEO Elon Musk has blamed supply chain price pressure for incremental price increases the company has made to its Model 3 and Model Y vehicles over the past several months. “Prices increasing due to major supply chain price pressure industry-wide,” the CEO tweeted in response to a complaint about the changes. “Raw materials especially.”

  Elon Musk blames ‘supply chain price pressure’ for Tesla’s increasing prices © Illustration by Alex Castro / The Verge

Today, the CEO followed up to say that “microcontroller chips” are a particular challenge right now. But although Musk said that he’s “never seen anything like it,” he added that he doesn’t expect this to be a long-term issue. “Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale.”

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Musk had previously indicated in an April earnings call that Tesla was well placed to weather the global chip shortage by “pivoting extremely quickly to new microcontrollers.”

Electrek has been tracking Tesla’s price changes in recent months. The Standard Range Plus version of the Model 3 has increased from $36,990 in February to $39,990 in late May, for example, while the Model Y Long Range AWD version has gone from $49,990 to $51,990 over the same period. Tesla has updated its prices almost half a dozen times since February this year.

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Tesla is far from unique in seeing its prices affected by the global chip shortage, which has had a wide-reaching impact on the manufacturing of everything from games consoles to toasters. Automakers have been particularly badly hit by the shortage, and have had to temporarily shut down production lines even as demand for new cars and trucks increases.

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