Elon Musk blames ‘supply chain pricing pressure’ for Tesla’s rising prices

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Tesla CEO Elon Musk blames price pressures in the supply chain for the increasing price hikes the company has implemented for its Model 3 and Model Y vehicles in recent months. “Prices are rising as a result of significant price pressure in the supply chain across the industry,” says the… CEO tweeted following a complaint about the changes. “Especially raw materials.”

Today, the CEO followed to say that “microcontroller chips” present a particular challenge. But while Musk said he’s “never seen anything like it,” he added that he doesn’t expect it to be a long-term problem. “Fear of running out is what makes any business overorder — like the toilet paper shortage, but on an epic scale.”

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

Electrek has followed Tesla’s price changes in recent months. Model 3’s Standard Range Plus version is up from $36,990 in February up to $39,990 end of May, while the Model Y Long Range AWD version has risen from $49,990 to $51,990 over the same period. Tesla has updated its prices nearly half a dozen times since February this year.

Tesla is far from unique in its prices being impacted by the global chip shortage, which has had a far-reaching impact on manufacturing everything from game consoles to toasters. Automakers in particular have been hit hard by the shortage and have had to temporarily shut down production lines, even as demand for new cars and trucks is rising.