SpaceX founder and Tesla CEO Elon Musk looks on as he visits the construction site of Tesla's gigafactory in Gruenheide, near Berlin on May 17, 2021.MICHELE TANTUSSI/Reuters
Tesla Inc Chief Executive Officer Elon Musk said the U.S. electric carmaker and his rocket company SpaceX are facing significant inflationary pressure in raw materials and logistics.
Musk in a tweet on Sunday also asked about inflation rate outlook and said his companies “are not alone,” retweeting an article saying the Ukraine-Russia conflict sent commodity prices to their highest levels since 2008.
Russia’s invasion of Ukraine has led to a surge in prices of metals used in cars - from aluminum in the bodywork to palladium in catalytic converters to the high-grade nickel in electric vehicle batteries - and customers are likely to foot the bill.
Tesla and SpaceX were not available for additional comments.
Soaring raw material prices has raised concerns about EV economics, as legacy automakers and startups prepare to launch new cars this year after overcoming problems related to chip shortages.
Additionally, geopolitical challenges arising from Ukraine’s invasion have affected factory operations in the United States and made it difficult for raw material suppliers to quote prices.
“Just as hopes the semi-conductor shortage was easing... the invasion has thrown up fresh disruptions to the supply of essential materials and a worrying surge in prices,” Hargreaves Lansdown analyst Susannah Streeter said.
Wells Fargo analysts noted that prices of nickel, a key material used in batteries, were up 130%, while cobalt, lithium and aluminum surged 16% to 88% this year.
Tesla last week raised prices of its popular SUVs and sedans in China and the United States by $1,000. Rivian Automotive Inc warned it would cut its planned production in half, while Toyota Motor Corp said it would scale back production due to supply-chain issues.
Shares of Rivian and Nikola Corp were down between 0.7% and 2.7%, while Tesla was marginally higher in trading before the bell.