Tesla to hike prices by $6,000 on all cars
Consumers already reeling from higher price tags on everything from gas to milk will now also have to shell out more if they want to drive an electric vehicle.
Elon Musk's luxury EV maker Tesla this week boosted prices by up to $6,000 for all models — but not all versions — of its electric cars. And the Austin-based company is not alone.
Prices for high-end electric cars from Cadillac, Rivian and Lucid have also gone up. While General Motors earlier this month announced it would cut the price of its cheapest Chevrolet Bolt to $26,595, making the vehicle the cheapest U.S. electric car, even that price would take half the average American's pre-tax earnings.
And while many new electric and plug-in hybrid vehicles are eligible for a federal tax credit of up to $7,500,
Tesla crossed the manufacturers' 200,000-sales threshold in 2018, triggering a phase-out of the credit, and the firm's cars have not been eligible since the end of 2019. General Motors, which makes the Bolt and Cadillac Lyriq, also passed the threshold.
Tesla did not immediately respond to questions about the price hikes, which were first reported by website Electrek.
Wedbush Securities analyst Dan Ives attributed Tesla's price-boosting to the supply problems and inflation that have arisen globally for many industries amid the coronavirus pandemic. “Price increases across the supply chain are catalyzing these latest price increases from Tesla as they pass them along to the consumer,” Ives said. “It's the nature of the beast in this inflationary backdrop.”
The company's cheapest vehicle, the rear-wheel-drive Model 3, was not included in the Wednesday cost hikes, and remains at $46,990. Despite years of promises from Tesla of a $35,000 mass-market version, the car was only available at that price for a very short window.
One of the other two Model 3 versions, the dual-motor, all-wheel-drive Performance, also saw its price stay the same — $62,990 — but the cost of the basic dual-motor, all-wheel drive Model 3 jumped $2,000 to $57,990.
Tesla's main production focus, Ives said, is the Model Y SUV, which is the next model up from the Model 3 in cost. The firm hiked prices for both versions of the Model Y, with a $3,000 increase to $65,990 for the dual-motor, all-wheeldrive, and a $2,000 boost to $69,990 for the Performance version.
For the Model S sedan, the dual-motor, all-wheel-drive version went up $5,000 to $104,990, while the cost of the three-motor Plaid version stayed at $135,990.
The biggest increase hit the dualmotor, all-wheel-drive Model X com
pact SUV, with Tesla increasing the price by $6,000 to $120,990. The cost of the triple-motor Plaid version remained at $138,990.
The company in December moved its headquarters
to Austin, despite adding to its office footprint in Palo Alto and continuing to operate a factory in Fremont that CEO Elon Musk said in April may expand significantly.
The price hikes come as governments around the world are setting targets to electrify transportation. California has ordered
that all new cars and light trucks sold must be zero-emission by 2035, and the White House wants half of all new-vehicle sales to be EVs by 2030, but electric cars remain far out of reach for most Americans. The country's median pretax income was $1,037 per week in the first three months of this year, according
to the U.S. Bureau of Labor Statistics, so the cheapest Tesla would eat up almost 90% of the average person's annual income.
Tesla last hiked car prices in March, after Musk tweeted that Tesla was suffering from “significant recent inflation pressure in raw materials and logistics.”