Tesla Raises Car Prices In U.S. Market

Tesla Inc. raised prices for all of its car models in the United States yet again in response to persistent global supply-chain issues and rising raw material costs, according to Reuters.

Photo Insert: Model Y production at Tesla Giga Texas

The electric carmaker raised the price of its Model Y long-range model to $65,990 from $62,990 on Thursday, after delaying deliveries of some long-range models in the United States by up to a month.

The 5% price increase comes as the cost of raw materials ranging from aluminum to lithium used in automobiles and batteries rises, while automakers struggle to find chips and other supplies due to an industry-wide shortage.

According to Credit Suisse, the price increase is the fourth in the United States in 2022. "While some concerned price hikes will destroy demand, for now Tesla remains supply constrained," the brokerage said.

Tesla CEO Elon Musk has previously stated that lithium is to blame for cost increases and is "a limiting factor" in EV growth, encouraging automakers to enter the lithium business. Rival Rivian Automotive Inc. has also raised the price of its base model by more than $10,000 for new orders.

Several automakers are expected to deliver electric vehicles to customers for the first time in their race to catch up to Tesla in the face of rising demand. Tesla shares were down about 4% in premarket trading, mirroring broader market losses.

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