According to the billioner – the numbers are much worse than reported.
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Tesla CEO Elon Musk believes inflation may be worse than previously thought and that it will not abate any time soon, despite a rise in prices in March.
CNBC reported that “during Tesla’s first-quarter earnings call on Wednesday, CEO Elon Musk answered questions about the recent price increase for Tesla vehicles.
Tesla’s goal of making electric vehicles widely available to the public in order to reduce their dependence on fossil fuels was also a topic of discussion.”
Tesla CEO Elon Musk said that “the company still aims to make EVs as affordable as possible, but admitted that current economic conditions and inflation make it difficult to do so.”
According to the Bureau of Labor Statistics,
“inflation climbed to 8.5% in March. As I see it, inflation’s official numbers are significantly lower than it really is. Inflation is expected to continue for the rest of the year,” according to Musk.
In addition to inflation and supply chain issues, the United States is dealing with labor shortages.
Elon elaborates the numbers from his own experience in dong business.
“It’s as if problems never end. CNN reported that “global supply chains may be disrupted for some time.” These issues have pushed Tesla’s production costs up, which in turn has pushed vehicle prices up.
Suppliers are demanding 20% to 30% price increases for parts, according to CNBC.
As a result of their contracts with suppliers, Tesla is trying to keep costs down, says CEO Elon Musk. Costs, on the other hand, will rise if contracts need to be renewed.
“We’ve locked in contracts with suppliers, so that’s helping to keep costs down for the time being. There will be a time when those modular contracts expire, and then the costs could rise significantly,” Musk said.
As inflation and supply chain issues continue to rise, Tesla has had to deal with rising raw material costs.
“Challenges around supply chain have remained persistent and our team has been navigating through them for more than a year,” the company stated in its shareholder deck, according to CNBC. Recent COVID-19 outbreaks have put additional strain on our supply chain and factory operations in addition to chip shortages already experienced. As a result, the cost of raw materials has risen by a factor of ten or more in recent months.”
“Obviously, we don’t control the macroeconomic environment” or whether or not “governments keep printing vast amounts of money,” Tesla CEO Elon Musk said.
Who’d you trust rather?