Photo: Salwan Georges | The Washington Post | Getty Images
As prices for the materials for EV batteries spike, auto companies announce a price increase for their electric vehicles.
While prices of batteries have been steadily declining over the years, the market conditions dictate otherwise. Companies like Cadillac, Rivian, Tesla, and others are expecting an increase because of inflation and market volatility.
The conflict between Russia and Ukraine has affected the global supply chain. According to a trusted firm, this will cause batteries markets to jack up the price of batteries up to 20%.
Electronic vehicles are expensive, and with price hikes, the average American will have a hard time purchasing one.
Tesla, the leading innovator of electronic cars, even had to increase prices — twice in March, to battle “significant recent inflation issues.” The company is known to be one of the first to initiate price reduction as part of its strategy to make zero-emission vehicles marketable to the public.
It is no question that the markets are volatile in the current landscape. This has led to prices for Teslas increasing by 23%, with their cheapest vehicle jumping from $38,190 to $46,990.
Meanwhile, the car company Rivia also announced price increases for their products during the first week of March. The company imposed an 18% increase for their R1T model – now priced at $79,500 – and their R1S jumped 21% and now sells at $84,500.
Rivian announced that they would be offering a lower price for their electric motors to make up for the increase in prices on 4-wheeled vehicles.
Rivian CEO RJ Scaringe wrote to the stakeholders after issues surfaced because of the announcement. “In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt,”
“Since originally setting our pricing structure, and most especially in recent months, a lot has changed. Everything from semiconductors to sheet metal to seats has become more expensive,” Scaringe explained.
The Lucid Group has announced that they will be applying price hikes to all Air Luxury sedan models except one. Models would see a 10-12% jump in prices.
Lucid CEO Peter Rawlinson told customers that the company would honor the rates of the reservations and orders made before the announcement. “The world has changed dramatically from the time we first announced Lucid Air back in September 2020,” Rawlinson said in a conference call.
Meanwhile, General Motors is increasing prices on some of its vehicles, including the Cadillac Lyriq crossover EV, which now costs $62,990, a $3,000 jump from its former price tag.
Ford Motor Company has surprised competitors with lower market prices – its F-150 Lightning debuted at just $39,974. Ford management is hoping that despite the developments concerning raw materials costs, they can maintain stable prices.
Ford Vice President of global EV programs, Darren Palmer, said: “We’re going to still keep it for everybody, but we’ll have to react on commodities, I’m sure.”
Opinions expressed by CEO Weekly contributors are their own.