Tesla hikes car prices in the U.S., China after CEO Elon Musk warns of inflation pressure

March 17, 2022: -Tesla has hiked the prices of its electric vehicles in the U.S. and China after CEO Elon Musk warned of inflation pressure on the business. The company raised the prices of all its models in the U.S. In China, a version of the Model 3 and the Model Y saw price hikes. It is the second increase within the last week.

Tesla did not give a reason for the increases. The company was not immediately available for comment when contacted by CNBC.

But Musk said in a tweet earlier this week that Tesla and his space exploration company SpaceX have seen “significant recent inflation pressure in raw materials & logistics.”

Materials such as nickel, a key component of electric vehicle batteries, are on the rise.

Meanwhile, a flare-up of Covid cases in China and lockdowns in some cities have added a further challenge to already-stretched supply chains. Critical components like semiconductors also remain in short supply.

On Tuesday, Tesla’s China website listed the starting price of the Model 3 Performance at 367,900 yuan ($57,648). The South China Morning Post reported on Mar. 10 the price was 349,900 yuan after a previous increase that day.

The Model Y Long Range in China now costs 375,900 yuan — up from the previous price of 357,900 yuan. The Model Y Performance is currently priced at 417,900 yuan, up from 397,900 yuan previously.