Elon Musk lower car prices as inflation clams down

Elon Musk says Tesla is waiting for inflation to “cool down” so it can finally start cutting prices for its electric vehicles, which have risen 20-30% in the past two years.

Tesla has made several price increases this year, so much so that the company’s entry-level models such as the Model 3 and the Model Y, are already approaching the prices of flagship cars like the Model S of a few years ago. For example, the Tesla Model 3, the company’s cheapest model, had seen its price increase by more than $10,000 in just a few months, or nearly 40% from its original price.

The COVID-19 pandemic and the war in Ukraine have had a major impact on the production lines of all car manufacturers and therefore inevitably led to price increases. Tesla also faced a significant increase in the price of nickel, which has also had an impact on the prices of electric vehicles.

Elon Musk waits for inflation to subside to lower prices

Responding to a user on Twitter wondering if prices would drop after the pandemic or when supply chain issues are ironed out, Elon Musk was reassuring. Tesla’s CEO has announced that his company is waiting for current inflation to subside before cutting prices.

Consumer prices in the United States rose 9.1% to reach their highest level in nearly 41 years in June, keeping prices of basic necessities such as gasoline and food high. In France, inflation reached 5.8% in June, so Tesla had no choice but to cut spending and raise rates. For example, the American manufacturer announced that it would lay off 10,000 employees due to the current economic situation.

The situation is not entirely catastrophic for the company, as although it saw its deliveries plummet in the second quarter of 2022 due to factory closures in China, the car company will still have shipped more than a million vehicles this year.