Tesla’s Higher Prices Due to Supply Chain Pressure, Says CEO Elon Musk

June
1, 2021

2 min read

Opinions expressed by Entrepreneur contributors are their own.

Elon Musk tweeted this week that the electric vehicle maker’s supply-chain pressure has been “especially” affected by the rising prices of raw materials, CNBC reports.

Musk was responding to an unverified Twitter account called @Ryanth3nerd who wrote: 

“I really don’t like the direction @tesla is going raising prices of vehicles but removing features like lumbar for the Model Y…”

Tesla raised the price of its Model 3 and Model Y vehicles in May — the fifth incremental increase in only a few months, according to the Electrek website. The cheapest Tesla is now $39,000.

At an earnings conference call in April, Musk said Tesla experienced “some of the most difficult supply chain challenges” from a computer chip shortage but added, “We’re mostly out of that particular problem.” 

However, other materials like steel and aluminum, which are crucial for the auto industry, have also seen significant cost increases in the past year. 

The billionaire entrepreneur also explained the removal of lumbar support on the passenger side of the Model Y:  “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.”

Musk says the supply chain pressure is affecting the entire industry.