The billionaire says his business could be hurt by inflation as commodity prices soar
© Getty Images / Spencer Platt / Staff
Tesla CEO Elon Musk said on Sunday that the US electric carmaker and his rocket company SpaceX are facing significant inflationary pressure in raw materials and logistics.
Musk also tweeted about the outlook for inflation and said his companies “are not alone,” retweeting an article saying the Ukraine-Russia conflict has sent commodity prices to their highest levels since 2008.
The prices of metals used in cars, such as aluminum, palladium, and high-grade nickel, have skyrocketed recently. Metals have not been the target of Western sanctions so far; however, some shippers and auto-parts suppliers are sidestepping Russian exports. This puts more pressure on carmakers already reeling from the chip shortage and higher energy prices.
Tesla’s shares closed 5% lower at $795.35 on Friday. They are down around 25% year-to-date.
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Last week, the EV maker raised prices of its US Model Y SUVs and Model 3 Long Range sedans by $1,000 each. The cost of some China-made Model 3 and Model Y vehicles was also up, by 10,000 yuan ($1,580).
Other carmakers have also struggled, with Rivian saying last week that supply chain issues could cut planned production in half due to soaring raw material prices and logistical constraints. Japan’s Toyota Motor Corporation has announced it will scale back domestic production by up to 20% for April-June to ease the strain on suppliers.
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