Elon Musk reveals ‘significant’ inflationary pressure on Tesla and SpaceX

The executive director of Tesla Inc, Elon Musk, said the electric car maker from USA and his rocket company SpaceX face significant inflationary pressure in raw materials and logistics.

Musk in a tweet on Sunday also asked about the outlook for the rate of inflation and said his companies “are not alone,” retweeting an article that said the conflict between Ukraine and Russia pushed commodity prices to their highest levels since 2008.

The tech tycoon disclosed that Tesla and SpaceX face “significant” inflationary pressure.

The Russian invasion of Ukraine has caused a spike in the prices of metals used in cars, from aluminum in bodywork to palladium in catalytic converters and high-quality nickel in electric vehicle batteries, and is likely customers pay the bill.

Tesla and SpaceX were not available for additional comment.

Elon Musk companies affected by high prices and shortages

Rising commodity prices have raised concerns about the economics of electric vehicles, as legacy automakers and startups prepare to launch new cars this year after overcoming problems related to chip shortages. which has also affected the automaker Elon Musk.

Additionally, geopolitical challenges stemming from the invasion of Ukraine have affected factory operations in the United States and have made it difficult for raw material suppliers to quote prices.

“Like hopes that semiconductor shortages were fading … the invasion has led to further disruptions to the supply of essential materials and a worrying rise in prices,” said Susannah Streeter, an analyst at Hargreaves Lansdown.

Wells Fargo analysts noted that prices for nickel, a key material used in batteries, have risen 130%, while cobalt, lithium and aluminum are up between 16% and 88% this year.

Last week, Tesla raised the prices of its popular SUVs and sedans by China and the United States at $1,000. Rivian Automotive Inc warned that it would cut its planned production in half, while Toyota Motor Corp. it said it would cut production due to supply chain issues.

Rivian and Nikola Corp shares fell between 0.7% and 2.7%, while Tesla traded slightly higher before the bell.

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