Elon Musk Says Tesla EV Price Hikes Happening Due To Supply Chain Issues

Tesla Inc. TSLA CEO Elon Musk has blamed industry-wide supply chain issues for the recent price increase of the company’s electric vehicles.

What Happened: Musk said on Twitter that the recent price increases by Tesla were due to major industry-wide supply chain price pressures, particularly related to raw materials.

Musk made the comments after customers complained about the price increases for the Model 3 and Model Y vehicles despite Tesla removing features such as the lumbar support on the passenger seat of the Model Y.

See also: How to Invest in Tesla Stock

The Tesla CEO said that the lumbar support feature was removed only for the front passenger seat because logs showed the feature was barely being used.

"Logs showed almost no usage. Not worth cost/mass for everyone when almost never used," Musk noted.

See Also: Tesla's Model S Plaid Deliveries Delayed By 1 Week, Musk Confirms

Why It Matters: Tesla has increased the prices of its Model 3 and Model Y vehicles several times since February this year.

Global supply chain issues, including the global chip shortage, have negatively impacted automakers and forced them to halt production lines. Tesla had halted production at its Fremont, California, plant in February for two days because of what Musk called “parts shortages.”

It was reported in late May that Tesla is exploring options to stay ahead of the global chip shortage by making advanced payments to contract chipmakers and buying a fabricating plant.

Price Action: Tesla shares closed almost 0.9% lower in Friday’s regular trading session at $625.22.

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