Photo: Salwan Georges | The Washington Post | Getty Images
Auto companies are jacking up prices of their electric vehicles amid rising prices of essential materials for EV batteries.
Companies like Tesla, Rivian, and Cadillac, among others, have announced their increase following the unsteady and volatile market conditions around the globe. However, battery prices have been steadily declining over the years.
The decision of many automakers followed after a trusted firm projected a ‘sharp increase’ in battery prices over the next four years. According to the firm, prices will hike by more than 20%, atop supply chain disruptions due to the conflict between Russia and Ukraine.
Electronic vehicles are expensive, to begin with — topped with the price hikes, the products will be even hard to acquire by the average American.
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.
Due to the volatility of the markets in light of recent events, Teslas are now more expensive than they were last year — with prices of their cheapest vehicle jumping from $38,190 to $46,990, a 23% increase.
Auto company Rivia also initiated a price increase of their products during the first week of March. The company announced an 18% increase in their R1T model (now valued at $79,500) and their R1S model (a 21% jump, now selling at $84,500).
However, Rivian simultaneously announced a lesser offer for their electric motors to compensate for the hikes of their 4-wheeled counterparts.
Rivian CEO RJ Scaringe wrote to the stakeholders after controversies surrounded 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,” he explained.
Meanwhile, the Lucid Group hinted to the public about the increase of their sedans as well. The company announced that price hikes would be applied to all Air Luxury sedan models except one. Models would see a 10 to 12 percent 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.
General Motors have also increased the price tag on some of its vehicles, including the Cadillac Lyriq crossover EV, which is now offered at $62,990, a $3,000 increase from before.
Ford Motor, on the other hand, has surprised competitors with lower market prices — its F-150 Lightning debuted at $39,974.
Ford management said that they would like to keep the prices stable even amid the developments concerning prices of raw materials, among others.
Darren Palmer, Ford’s vice president of global EV programs, said, “We’re going to still keep it for everybody, but we’ll have to react on commodities, I’m sure.”
