For the second time in less than a week, Tesla’s raised prices on its vehicles in the U.S. and China.
The EV maker raised prices 5% to 10% on all its U.S. offerings, depending upon model and trim level. Prices in China rose about 5% on the Model 3 and Model Y. Those vehicles are made in China.
They follow the jump late last week, that saw the Model Y Long Range leap 20% and the Model 3 Long Range rise 10.6%, Reuters reported. Prices in China went up the same amount.
The company increased prices for the most affordable versions of Model 3 and Model Y about a dozen times last year in the United States, according to Reuters. CEO Elon Musk tweeted that Tesla and SpaceX, Musk’s reusable rocket company, are facing massive price hikes “for raw materials and logistics.”
The raw materials Musk references include nickel, lithium, palladium, platinum and more. The rising prices not only impact production capability, but more immediately could temporarily reverse the long-term trend of falling costs of batteries, according to Greg Miller, an analyst at industry forecaster Benchmark Mineral Intelligence.
“However, I think we are now in for a sustained period of higher pricing, which will drive up [battery] cell costs,” Miller told Emerging Tech Brew, a technology website. Miller noted he believes prices will drop back to previous levels, if it does happen.
Full steam ahead
The price increases come as Tesla just received approval from the German government to being vehicle production at its $6.9 billion Gigafactory just outside Berlin.
The plant, which was expected to already be well into its production ramp up, has experienced a series of delays. The site, which will build the Model Y, is critical to Musk’s plans to unseat Volkswagen as the top seller of EVs in Europe.
VW, which is spending more than $100 billion to convert all of its brands to EVs around the world, currently holds a 25% share of EV sales in Europe whereas Tesla is at about 13 percent. However, the German automaker possesses a massive advantage over its American rivals — at least for a little bit longer — European-based production.
GigaBerlin, as it’s been dubbed by some, is Tesla’s first plant on the continent. For now, Tesla’s been shipping vehicles from the U.S. and China to Europe. While frustrating, the delay isn’t necessarily a big shock.
Musk likely knew building a plant in Germany would be — at the very least — a trying experience. Unlike construction of the plant in China, where most of the bureaucratic bottlenecks were resolved for him as the country was desperate for more EVs, this project’s hit all the hurdles.