Elon Musk warns of strong inflationary pressure for Space X and Tesla The effects of the war in Ukraine are already present in the world economy. Elon Musk is concerned and has explained to us why...

Yesterday Elon Musk , CEO of Tesla and SpaceX , and one of the world's greatest entrepreneurs, sent a question to his followers via Twitter: "What do you think of the likely rates of inflation over the next few years?" The tweet unleashed a chain reaction of likes, retweets and comments (at the time of writing this note, more than 33 thousand) that clearly shows the global concern around the issue. Since the armed conflict between Russia and Ukraine began, the prices of raw materials have risen, reaching levels not seen since 2008. Among the inputs that have increased their prices are the metals used for the manufacture of cars ( nickel, palladium, and aluminum) that will no doubt impact production costs for Tesla and Space X.

After leaving a couple of hours for his followers to comment, Musk posted again to explain that "Tesla and SpaceX are experiencing significant recent inflationary pressure in raw materials and logistics ." He then shared a link to a link to an article explaining that commodity costs are already poised for the biggest week-over-week increase since 1970. This latest message from Musk came from accompanied by the phrase "and we are not alone".

What are your thoughts about likely inflation rate over next few years?

— Elon Musk (@elonmusk) March 13, 2022

THE EFFECTS OF A WAR

The war in Ukraine has caused an increase in the prices of natural gas and this has altered the prices of various products such as oil, coal, crude oil, wheat and barley. We live in an interconnected world and what happens in one market irremediably alters the others. According to Dun & Bradstreet : "at least 374,000 companies worldwide trust Russian suppliers and at least 241,000 companies worldwide trust Ukrainian suppliers. Countries with affected supply chains include the United States, Canada, Italy, Australia, China, and Brazil." The company dedicated to providing financial information warns that there are 25 countries that are highly dependent on Russia and Ukraine for obtaining various raw materials.

The report warns of potential fallout from the conflict that could further complicate matters, including the exacerbation of the energy crisis in Europe and disruptions to the global supply chain.

These data prove Elon Musk right: he is not alone. The concern is shared.

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