Tesla Model Y, Courtesy of Tesla Inc.
Nicolas Caballero's picture

Tesla Intends To Lower Price Of EVs, Current Pricing "Embarrassing"

Tesla's CEO Elon Musk believes that the current prices of Tesla electric cars "are embarrassing", and expects a reasonable decrease soon, under certain circumstances.
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Elon Musk has spoken out against the unstoppable rise in prices in Tesla's gamut of electric cars. The CEO and founder of the Austin company believes that these are "shameful" and already aspires to be able to present a reasonable decrease, once the current monetary inflation is reduced.

As stated before, the CEO is obviously aware of the current general rise in the prices of his electric models: up until not so long ago, you could buy a Tesla Model 3 for just under 45,000 dollars, while now it has an initial price of 52,000 dollars. "This is a growing problem that we need to address as soon as possible," Elon Musk said to his top investors during the Q2 earnings call.

Added to this generalized rise in prices are the systematic delays in the actual delivery of vehicles to their final owners, a problem that has worsened in recent months due to lack of supplies – and other logistics issues -, a fact that has also caused a corresponding rise in prices.

“We have raised our prices several times. Frankly, they are at shameful levels”, the CEO pointed out during the Q2 earnings call, where he was very blunt with the issue of the current rates of his models; although he defended Tesla referring to the impact that the company is suffering due to the problems in supply chain, production issues and rampant inflation, something that is finally being reflected in the bill to the final customer.

Tesla Model X, courtesy of Tesla Inc.

During his speech, Elon Musk stated that he hopes this is something that will not last for a long time, since he estimates that by the end of the year the current inflation will have largely subsided. “I think inflation will decrease towards the end of the year. I am hopeful that at some point we will be able to reduce prices a bit,” he said.

However, he pointed out that inflation is only "a small culprit" in this rise in prices, since he mainly blames problems in industrial production and lack of raw supplies, as the demand for electric vehicles has actually increased; but the supply is still very limited, however illogical all this might sound. Nevertheless, he also sees a notable improvement in this fields for the coming months, since Tesla aims to be able to manufacture up to 40,000 cars a week by the end of this year, 2022; this, coupled with the possible drop in inflation rates, would eventually (and hopefully) cause Tesla prices to decline in the coming months.

Tesla Model S, courtesy of Tesla Inc.

Despite all these issues, between the first and second quarters of 2022 Tesla actually managed to manufacture more than 560,000 units, thus exceeding the figure reached in the same period of the year 2021. Currently the Austin, Texas company already aims to exceed the almost one million cars manufactured last year, and already estimates a possible annual circulation of around 1.2 million models by the end of 2022. Additionally, the adjusted profit per share for Tesla was well above estimates for the second quarter, something that many market analysts and experts in the field indicate to be a very promising future for the brand.

All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.


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