How big of a price increase would you tolerate?

[EV Rob]

I’m HOPING those of us pre ordered will lock in the price. Tesla already took off the price from their CT page so price increase is inevitable. However price if iron ore has dropped 50% very recently so hoping inflation is temporary. Tesla also increase price to reduce wait time so my guess they will increase price after production get started because the wait is already 2 years minimum.

I too hope prices wont go up . But we need to be realistic. Inflation just rose over 6%. Autos, like Ogre posted, are a big part of that inflation. We all see almost everything going up. Demand is up due to all of the money flooding the economy, with supply of both labor and materials constrained. Many factors suggest those constraints are not short term.

https://news.yahoo.com/u-faces-record-high-inflation-130604980.html

The last time inflation exceeded 6% in 1973, it took a decade of pain before increases consistently dropped below 6%. Prices more than doubled in that decade.

https://www.macrotrends.net/countries/USA/united-states/inflation-rate-cpi

Iron ore prices were driven up by over-investment by China, and are settling back as that excess is curbed.

https://www.mining.com/iron-ore-price-on-track-for-fifth-weekly-fall-on-demand-worries/

But lithium prices are going up faster than iron ore could possibly drop. And steel prices are stable despite the price drop in iron ore, due to rises in other costs.

https://tradingeconomics.com/commodity/lithium

It is impossible to know where inflation is heading, but history says it is unlikely to abate quickly.

Sponsored

 

[John K]

So, what you are saying is in order for Tesla to stay ahead of inflation, they should start production now and have my reservation number by Christmas? I agree.

@Ogre Bitcoin!

 

[Ogre]

 

[Crissa]

There's no evidence this is inflation. History would be a guide if you actually looked at the prices in more than one sector at a time.

Healthcare, tuition, are under 2% inflation. After rising 200% last year, lumber has already dropped to 50% its peak price. Rent is steady overall and fell in core high demand areas. TVs and personal electronics went up, but are already falling back down. Used car prices didn't go up because metal got more expensive - it went up because more people wanted cars. Those who bought cars in the last two years won't be buying another ICE car soon, so those prices will drop next year.

These are all supply issues. As spending shifted from services and eating out and things like movie tickets it went somewhere: Into buying stuff. At the same time, the supply of that stuff narrowed due to the pandemic. So something had to give, and that thing is prices.

That doesn't mean there's inflation. It messes with our measurement of core inflation, sure, and some things really will be more expensive. But supply will catch up with other things and stores will get shipments they had been waiting on and then have to liquidate stuff and sales will happen and then prices will drop again.

Tesla isn't going to be looking at dropping demand, but... They will have a ton of supply coming online next year and the year after. As they catch up to demand, they'll lower their prices. They always have.

-Crissa

Sponsored