You can be on Entrepreneur’s cover!

Tesla's Higher Prices Due to Supply Chain Pressure, Says CEO Elon Musk Tesla stock is down 14% so far this year.

By Euni Han

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Bloomberg | Getty Images

Elon Musk tweeted this week that the electric vehicle maker's supply-chain pressure has been "especially" affected by the rising prices of raw materials, CNBC reports.

Musk was responding to an unverified Twitter account called @Ryanth3nerd who wrote:

"I really don't like the direction @tesla is going raising prices of vehicles but removing features like lumbar for the Model Y..."

Tesla raised the price of its Model 3 and Model Y vehicles in May --- the fifth incremental increase in only a few months, according to the Electrek website. The cheapest Tesla is now $39,000.

At an earnings conference call in April, Musk said Tesla experienced "some of the most difficult supply chain challenges" from a computer chip shortage but added, "We're mostly out of that particular problem."

However, other materials like steel and aluminum, which are crucial for the auto industry, have also seen significant cost increases in the past year.

The billionaire entrepreneur also explained the removal of lumbar support on the passenger side of the Model Y: "Moving lumbar was removed only in the front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used."

Musk says the supply chain pressure is affecting the entire industry.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

James Clear Explains Why the 'Two Minute Rule' Is the Key to Long-Term Habit Building

The hardest step is usually the first one, he says. So make it short.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Living

Get Your Business a One-Year Sam's Club Membership for Just $14

Shop for office essentials, lunch for the team, appliances, electronics, and more.

Business News

Microsoft's New AI Can Make Photographs Sing and Talk — and It Already Has the Mona Lisa Lip-Syncing

The VASA-1 AI model was not trained on the Mona Lisa but could animate it anyway.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.