Elon Musk, chief executive of Tesla Inc, said on Sunday that the U.S. electric vehicle and his rocket company SpaceX are facing substantial inflationary pressures in raw materials and logistics.
Musk also asked about the prognosis for inflation rates in a tweet, noting that his companies "are not alone," retweeting an article claiming that the Ukraine-Russia conflict had pushed commodity prices to their highest levels since 2008.
The price of metals used in automobiles has risen as a result of Russia's invasion of Ukraine, from aluminum in bodywork to palladium in catalytic converters to high-grade nickel in electric vehicle batteries, and drivers are set to shoulder the price.
While metals have so far escaped Western sanctions, some shippers and auto-parts suppliers are avoiding Russian goods, adding to the strain on automakers who are already dealing with chip scarcity and rising energy costs.
Consumer inflation in the United States reached its highest level in four decades, owing to rising housing, food, and petrol prices, bolstering the case for the Federal Reserve to raise interest rates.
Tesla's stock has lost roughly 25% of its value year to date, closing 5% down at $795.35 on Friday.
Last Monday, the electric vehicle manufacturer increased the cost of producing its U.S. car models.
Model Y SUVs and Model 3 Long Range sedans will cost $1,000 more, while some Model 3 and Model Y vehicles built in China will cost 10,000 yuan ($1,582.40).
Rivian Automotive Inc, a U.S. electric vehicle manufacturer, said last week that supply-chain concerns could slash its planned output in half, citing rising raw material prices and supply-chain bottlenecks as reasons.
Toyota Motor Corp. of Japan said it would cut domestic output by up to 20% in April-June to relieve pressure on suppliers dealing with chip and other part shortages.
The United States Bureau of Labor Statistics said this week that an increase in the indices for fuel, lodging, and food were the major contributions to the seasonally adjusted all-items increase.
The gasoline index jumped 6.6% in February, accounting for nearly a third of the monthly increase in all goods; other energy component indexes were mixed.
The food index increased by 1.0%, while the food at home index was up by 1.4%, marking the highest monthly gains since April 2020.
Concerns of an aggressive tightening of monetary policy by the U.S. Federal Reserve, as well as key interest rate hikes, have arisen as a result of the country's inflationary pressures.
