Experts have expressed scepticism following Tesla CEO Elon Musk (TSLA, $721,64) confirming lower car prices on Twitter saying, “If inflation calms down, we can lower prices for cars."
The price of raw materials like nickel, cobalt, and palladium used to make batteries for electric vehicles has skyrocketed as a result since the war in Ukraine. Car manufacturers have increased prices to cover the cost of the raw materials. Additionally, low inventories have caused a supply and demand imbalance that has also resulted in a significant increase in vehicle costs.
Tesla prices have steadily increased for the past year for a number of models, with price hikes ranging from $2,000 to $6,000. The most recent rise came last month in June when the price of the long-range Model 3 sedan has increased from $54,490 to $57,990. Model Y performance rose from $67,990 to $69,990, while the Model Y long range jumped from $62,990 to $65,990. Musk has also promised to lower the cost of electric vehicles with a goal to sell one for $25,000, but once more, costs have been rising for the last couple of years, making most models less affordable.