It’s no secret that Tesla has been raising its prices throughout the year. Today, the least expensive vehicle in the lineup is the Model 3 which starts at $46,990. That’s up more than $10,000 since launch only a few years ago and it’s indicative of a move seen across the entire Tesla family of vehicles. Elon Musk knows that it’s a problem and said so in a recent earnings call.
While Tesla buyers might be immune to the kind of antics some dealers get up to with markups, the EV company can and does increase pricing across the board with some regularity. This year alone, the Model X has seen an increase in price of some $16,000 between January 1st and today. For his part, the CEO acknowledged the price bumps directly.
“We’ve raised our prices quite a few times… They’re frankly at embarrassing levels. But we’ve also had a lot of supply chain and production shocks and we’ve got crazy inflation,” Musk said on the company’s second-quarter earnings call earlier this week, according to Automotive News.
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Thankfully, he also thinks that the economy will soon improve and even offered a little hope that pricing could be reeled in a little later in the year. “I think inflation will decline towards the end of the year… I’m hopeful — and this is not a promise — but I’m hopeful at some point we can reduce prices a little bit,” Musk said.
The big issue at the heart of pricing is a combination of inflation and supply chain issues, said Musk. “Right now our problem is very much production.” He thinks the brand will continue to improve in that effort throughout the remainder of the year though, adding that “We’ve had many 30,000 car weeks already, so I think a 40,000 car week is within our reach by the end of the year.”
Despite supply chain difficulties, Tesla did just finish out its most productive month ever globally. Now, it’ll try to continue the ramp up towards a total volume worldwide in excess of 1,200,000 vehicles. While inflation reduced gross margin for Tesla in Q2, adjusted profit per share was above estimates signaling good times could be just ahead.
