When will prices for those top-of-the-line electric vehicles from Tesla go down?
Tesla CEO Elon Musk tweeted one condition for that to happen. He said the automaker could bring its prices down if inflation "calms down."
Any plans to down the price of cars after pandemic or supply chain matters?
— Jaehwan Cho 조재환 (@hohocho) July 15, 2022
U.S. Inflation at 41-year High, Tesla Continues to Hike Electric Car Prices
Tesla prices have gone up 20-30 percent in the last couple of years. U.S. inflation has gone up annually, to a close to 41-year high, the U.S. Bureau of Labor Statistics said in an Interesting Engineering report.
Tesla had intended from the start that it sought to reduce the prices of electric vehicles, with Musk indicating he wanted to sell electric cars at $25,000 to make them more affordable. Despite this, however, Tesla continued to market its EVs on the upscale tier of vehicle pricing in the last two years.
Even with the high prices, Tesla remained in demand. The automaker continues to face a huge backlog of orders, with some models having a six- to ten-month delivery timeline for new orders, the Interesting Engieering report further said.
Tesla car prices went up several times in the past months due to surging raw materials costs as automakers have struggled in the face of worldwide, industry shortages in chips and other supplies.
Tesla jacked up prices of all of its car models in the U.S. and China last March. In June, the company again hiked prices of all its models in June as it increased the price of its Model Y long-range, by $3,000, from $62,990 to $65,990.
Before the increase in Tesla prices, Musk expressed having "super bad feeling" about the U.S. economy in June , prompting him to say that he needed to lay off 10 percent of salaried workers at Tesla, according to a Reuters report.
He also said in March that the two companies he heads--Tesla and SpaceX-were both "seeing significant recent inflation pressure in raw materials & logistics." Musk likewise warned about the risk of a recession.
Currently, the entire car manufacturing industry is struggling to balance commodities and logistics costs worldwide.
The average electric car price has risen 22 percent in 2021 as automakers attempted to recover commodity and logistics costs.
Tesla to Report 3Q Earnings; Missed Earnings, Production Estimates Expected
This comes as Tesla reports its quarterly earnings on Wednesday.
According to a Barron's report, Tesla could earn less than expected. Profit estimates for the second quarter began at around $2.30 a share. Currently, they stand at around $1.85, falling to around 20%. Vehicles delivered, on the other hand, were forecasted to be around 350,000 units, but the automaker actually delivered only254,695 cars during the quarter or a 27% slide, seven percentage points worse than the decline in profit estimates.
Lockdowns in China due to COVID-19 contributed to the production drop, given that they affected the output of Tesla's most productive plant, the company's Shanghai facility.
