Tesla Inc (Nasdaq: TSLA) hiked the price of its cars once again in the US against the backdrop of a surge in the price of input materials and logistics hurdles. Notably, the price of some of its models has gone up by $6,000. Unfortunately, price rise has become a common phenomenon across all consumer goods this year, and Tesla is no different from them. The price of its vehicles underwent two hikes within a week in March. This was followed by another hike on certain variants of Model 3S in April. The stock lost 8.54% or $59.70 to end Thursday’s trading session at $639.30.
The Austin, Texas-based Tesla made changes to its web-based configurator yesterday to reflect the rise in the cost of its entire fleet of vehicles, as per Electrek, which continues to monitor the price hike. Past (archived) pages (as recent as April 23) of the electric car manufacturer’s website, accessible through Wayback Machine, confirm the upward revision of price.
According to Electrek, Tesla has increased the prices of certain variants of Model X, Model 3, Model Y, and Model S cars. With a price hike of $6,000 to $120,990 (from $114,990), the Model X Dual Motor All-Wheel Drive version recorded the steepest increase. Also, the Model S Dual Motor All-Wheel Drive variant has undergone a price rise of $5,000 to $104,990. Interestingly, excluding one version of Model 3 – the cheaper version of the Tesla car –– the rest did not undergo any change in price. In particular, the Long Range variant of Model 3 saw a price hike of $2,500 to $57,990. The cheapest version of Model 3 – the Rear-Wheel Drive model (sold online) – retains its price tag of $46,990. It can be remembered that this variant recorded a price hike in March.
Even the price of the Long Range Model Y has been increased by $3,000 to $65,990. Similarly, the Performance model has recorded a price rise of $2,000 to $69,990.
Like always, Tesla did not provide any clarification for the price hike. Considering similar decisions by its rivals, we can safely assume that a surge in raw material prices, supply chain hurdles, and a slowdown in production in China have played a part in the price hike.
In April, following the release of first-quarter results, Tesla’s CEO Elon Musk opined that inflation is higher than official figures and will probably remain so for the rest of this year. He also stated that worldwide supply chain issues could affect production in the months ahead. Elon Musk is yet to comment on the latest price hike.
In the last few years, Tesla has been hiking the price of its vehicles without any hint of caution. Last year, while hiking rates, Musk passed the blame on supply chain issues, a surge in the cost of raw materials, and chip scarcity. So far this year, Tesla had blamed only inflationary pressure and higher transportation costs for the earlier price hikes.
A few years ago, Tesla, in an attempt to boost sales, announced a rate cut on its Model 3 variant. Specifically, not long ago, Model 3 was offered for just $35,000.
The rate hike is expected to keep the stock range-bound in the short-term but bullish in the long-term (as it will improve its bottom line).
The historical price chart indicates that the stock of Tesla is descending after failing to break the resistance at 1100. The stock has also formed a double top pattern. Additionally, the stock is trading below its 50-day moving average, while the stochastics indicator is in the bearish zone. The next major support is anticipated only near 550. Therefore, we are anticipating the stock to remain in a downtrend in the short term.
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