Here's Why Tesla Constantly Increases Prices

Pricing / Comments

The one and only Elon Musk answers the question.

For over a year now, Tesla has been increasing prices for its most popular vehicles. Both the Tesla Model 3 and Model Y continue to get more expensive with the most recent change happening only a couple of weeks ago. The price has been increased by about $500 each time but it adds up. The Model 3 cost $2,500 less in March.

Tesla instituted these price changes without prior warning, so it's been in the customers' best interest to make a purchase sooner rather than later. But why are these increases happening in the first place? Is it because of high demand? Or, just because Tesla is in the position to do so?

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https://twitter.com/elonmusk/status/1399492488612691973

A Twitter user directly asked CEO Elon Musk and he actually replied. "Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially." Musk recently admitted the company has been experiencing supply chain related problems but it seems to have a steady supply of semiconductor chips, a key ingredient a majority of automakers currently lack.

A more specified list of those raw materials was not provided but it's widely known things like copper, steel, and aluminum have all increased in price in recent months. The Twitter user also asked why Tesla is removing features on the Model Y, specifically lumbar support. Musk again provided a direct reason.

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2020-2021 Tesla Model Y Lateral View Tesla
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"Moving lumbar was removed only in the front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used."

Tesla has not been engaging in price gouging, as many have wondered. It's simply costing more to build cars right now than in previous months. There's no way of predicting when or if raw material prices will decrease.

Tesla is essentially in the same situation as every automaker on the matter but based on its current and projected delivery figures, most buyers don't seem to care.

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