Tesla Forced To Raise Car Prices Amid The Threat Of A Global Economic Recession

JAKARTA - Tesla Inc has again raised sales prices for all of its car models in the United States in response to persistent global supply chain problems and soaring raw material costs.

The electric carmaker raised the price of its Tesla Model Y to $65.990 from $62.990, as it appeared on its website on Thursday, June 16. Tesla has also delayed deliveries of some long-range models in the US by up to a month.

The 5% price increase came as the cost of raw materials for aluminum to lithium used in cars and batteries soared. Meanwhile, the automaker is struggling for chips and other supplies due to industry-wide shortages.

Credit Suisse said the price hike was in some cases the fourth in the United States in 2022. "While some worrying price increases will crush demand, for now, Tesla is keeping supply in check," the broker said, as quoted by Reuters.

Tesla Chief Executive Elon Musk has also previously said that lithium is responsible for rising costs and a "limiting factor" for EV growth. This is what is also pushing automakers to get into the lithium business.

Rival Rivian Automotive Inc has also raised the price of more than USD 10.000 (IDR 144 million) for new orders for their entry-level car.

Rivian's Chief Financial Officer, Claire McDonough, said last Thursday, during the Deutsche Bank Global Automotive Industry Conference, that customers are choosing the most advanced models despite rising prices.

"(It's) leverage when we think about the world of inflation, and the pricing headroom we believe we have for our vehicles," McDonough said.

Several automakers are expected to ship electric cars to customers for the first time in their race to catch up with Tesla amid growing demand.

Musk, the world's richest man, has warned about the risk of a recession in recent weeks. He said earlier this month he had a "very bad feeling" about the economy and that Tesla needed to cut 10% of its workforce.