Tesla having to raise prices to cope with rising raw material costs, says Musk

Tesla Inc (NASDAQ:TSLA) is increasing the prices of its cars because of raw material inflation, boss Elon Musk says.

Like many companies, the US car maker has been nudging up prices in recent weeks.

The auto industry has also been dealing with a global shortage of microchips, which started to become apparent last year.

“Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially,” Musk said on Twitter in reply to another users question.

In April, the Tesla CEO said the company had “some of the most difficult supply chain challenges” during the first quarter of 2021, though he added it was “mostly out of that particular problem” as it was able to cope by adapting its software so it could use chips from different suppliers.

In the first quarter, Tesla recorded a 13% decline in average sales prices, which reflected an 83% decline in higher-priced Model S/X vehicles.