Billionaire says his business could be hurt by inflation as commodity prices soar
Tesla CEO Elon Musk said on Sunday that the US electric car maker and its rocket company SpaceX face significant inflationary pressure in raw materials and logistics.
Musk also tweeted about the inflation outlook and said his companies “are not alone” retweeting an article saying the conflict between Ukraine and Russia has driven commodity prices to their highest level since 2008.
Prices for metals used in cars, such as high-grade aluminum, palladium and nickel, have recently skyrocketed. Metals have not been the target of Western sanctions so far; however, some auto parts shippers and suppliers avoid Russian exports. That puts more pressure on automakers already reeling from chip shortages and rising energy prices.
Shares of Tesla closed 5% lower at $795.35 on Friday. They are down about 25% since the start of the year.
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Last week, the electric vehicle maker hiked the prices of its Model Y U.S. SUVs and long-range Model 3 sedans by $1,000 each. The cost of some Chinese-made Model 3 and Model Y vehicles also increased by 10,000 yuan ($1,580).
Other automakers 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 said it would cut domestic production by up to 20% from April to June to ease pressure on suppliers.
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