Tesla’s numerous price hikes this year | Fans may be disappointed

Tesla has been raising prices on numerous occasions in the recent past, and this may not go down too well for the “Cult” brand’s fans. 

 

It is astounding to note how many times the electric vehicle (EV) giant has revised prices just this year. So much so that even its chief executive officer (CEO) Elon Musk said that Tesla’s prices are at embarrassing levels.

A Tesla charging point -- Source: Pixabay.

Globally, the auto sector — similar to many other sectors — has been still bearing the brunt of Covid-19. Currently, concerns around supply chain and inventory shortage are hounding the auto players.

According to Musk, supply chain and production bottlenecks as well as inflation are to blame for the rising prices.

 

He had said at a meeting on Tesla’s second quarter (2022) earnings that, “We’ve raised our prices a number of times. They’re at embarrassing levels now. But there are supply chain and production shocks as well as the crazy inflation.”

 

But Musk seemed bullish, saying inflation may moderate soon. If this actually happens, Tesla does not need to raise car prices but can rather bring them down.

 

On the occasion, Musk added, “I think inflation will fall before the end of the year. I’m upbeat — but this is not a promise — that at some point, we can cut prices a little.”

According to Musk, Tesla is not facing a demand problem but rather the issue is turning out to be production. He also unveiled that Tesla is doing its best to make delivery timelines shorter.

If Tesla cuts its prices, many more would flock for its vehicles. And, with the production bottlenecks, this would not be a happy situation for Musk.

 

It would just make things worse as delivery times would go up substantially, irking Tesla customers further.

 

Recently, Musk had said that Tesla may cut its workforce. If this happens, it may also lead to attrition (in addition to those getting pink slips) and this could escalate the production problem even further.

 

After all, Tesla’s laid off and other employees could find lucrative jobs elsewhere, especially in the wake of the burgeoning competition in the EV space.

 

Owing to the production problem, Tesla hasn’t yet brought the Cybertruck to the market, and for the same reason, it shelved its affordable compact car roll out plan.

Introducing the Cybertruck and the compact car now would only add to the production woes of Tesla.

 

But what could be a relief is that Tesla has come up with two new factories in the US and it’s on an expansion spree in China. Also, its Fremont facility is set to grow, and future Gigafactories are on Musk’s radar.

Musk reiterated that the Cybertruck is coming in 2023 itself. Despite Musk’s optimism, it is to be seen whether it is actually rolled out.

Tesla has been raising prices on many occasions, disappointing customers, and not adhering to production timelines could annoy its fans further and this may come as a big boost for rivals, who are gearing up to take on Musk with mega EV plans.