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Automakers Raise Prices for Electric Vehicles

Car companies pass the costs of making their electric vehicles on to customers as material prices rise

Most car companies, from Tesla to Rivian and Cadillac, are raising electric vehicle prices amid volatile market conditions and rising costs for goods and materials, especially the basic materials needed to make electric vehicle batteries.

Battery prices have been declining for many years, but that is about to change, as some companies expect a sharp rise in demand for metals used in batteries over the next four years, which will push the prices of electric vehicle battery cells to rise by 20%, in addition to price volatility. The advance of raw materials related to the battery industry as a result of supply chain disruptions related to the Covid virus and Russia’s invasion of Ukraine. Read more [How Will the Russian War Reduce Car Production?] and [Japan’s Honda’s Prospects are Weak as Costs Rise].

The market leader – Tesla – has worked for many years to reduce the costs of its vehicles as part of its “secret plan” to encourage the world’s move towards zero-emissions transportation, but despite this, it has had to raise its prices several times over the past year, including twice during March after CEO Elon Musk warned that both Tesla and SpaceX were “experiencing massive inflationary pressures” on raw material prices and transportation costs. Read More [Musk Gives Up Some Tesla Shares to Complete Twitter Deal].

Rivian was one of the first companies that rushed to raise prices, and Lucid Group also passed some of the increased expenses to its luxury car customers. Read more [Rivian Shares Jump Despite First-Quarter Loss] and [Lucid Plans To Enter Europe Market This Year].

General Motors, for its part, has revealed that it has raised the price of its Kaydak Lyric electric vehicle, despite its recent plans to drive cost-cutting to make electric cars more affordable to consumers with partner Honda, and rival Ford Motor has followed suit in raising prices. Read more [GM and Honda Will Produce Affordable Electric Cars] and [Ford Motors is Giving Up More Shares of Rivian].

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