Elon Musk, the CEO of Tesla, warned on Sunday that his firm and his rocket company, SpaceX, are under severe inflationary pressure in raw materials and logistics.
Musk also questioned about the prognosis for inflation rates in a tweet, noting that his firms “are not alone,” retweeting an article claiming that the Ukraine-Russia war had pushed commodity prices to their highest levels since 2008.
The price of metals used in automobiles has risen as a result of Russia’s military incursion in Ukraine, from aluminum in bodywork to palladium in catalytic converters to high-grade nickel in electric vehicle batteries, and drivers are likely to foot the tab.
While Western sanctions have not yet targeted metals, certain transportation firms and auto parts suppliers are avoiding Russian goods, adding to the strain on automakers who are already dealing with a chip scarcity and rising energy prices.
Consumer inflation in the United States reached its highest level in four decades, owing to rising housing, food, and petrol costs, bolstering the argument for a Federal Reserve interest rate rise.
Tesla’s stock has lost roughly 25% of its value year to date, closing 5% down at $795.35 on Friday.
Tesla boosted the pricing of its Model Y SUVs and Model 3 Long Range sedans in the United States by $1,000 apiece last week, as well as select Model 3 and Model Y cars built in China by 10,000 yuan ($1,582.40).
Rivian Automotive, a US electric car manufacturer, stated last week that supply-chain concerns might slash its projected output in half, citing high raw material prices and supply-chain bottlenecks as reasons.
Toyota Motor Corp. of Japan said it will cut domestic output by up to 20% in April-June to relieve pressure on suppliers dealing with chip and other part shortages.
Reuters reached out to Tesla and SpaceX for comment, but neither company responded right away.