A South Korean journalist asked Elon Musk directly on Twitter if he thought the price of the Tesla Model S, 3, X and Y would drop, after two years of sharp increases. The entrepreneur’s response was not long in coming: “if inflation calms down, we can lower the price of cars”replied the boss of Tesla.
The COVID-19 crisis, war in Ukraine, energy crisis and shortage of components have driven up the price level since the beginning of 2022 all over the world. The current rate, around 10% per year in some countries, is at its highest for 40 years. For its part, Tesla is seeing its supply, storage and assembly costs increase as a result of this flurried international context.
If inflation calms down, we can lower prices for cars
— Elon Musk (@elonmusk) July 15, 2022
Elon Musk wants Tesla price cuts, but inflation is holding him back
And that is why the manufacturer has had no choice but to repeatedly increase the price of its Tesla since 2020. Four months ago, Tesla thus, for example, again increased the price of the Model 3 in France. Just before these increases, the base price of the Model 3, including the environmental bonus, was less than €40,000.
However, it is now necessary to reckon with a list price from €49,990, which only gives the right to an ecological bonus of €2,000 – making Tesla’s most accessible proposal much less attractive in France. The energy transition and the international context are pushing more and more French people and Europeans to buy an electric car.
A choice which nevertheless remains reserved for relatively well-to-do consumers, even though the State is setting up aid for low-income households such as the “electric car at €100 per month”. For now, the context seems to indicate that these price increases will not be reversed in the medium term.
We do not know, for any of the causes attributed to these increases, a horizon for ending the crisis. And with the ban on the sale of new diesel and petrol vehicles from 2035 in Europe, it’s a safe bet that demand will remain at a level significantly above supply for some time. It remains to be seen whether alternatives to conventional battery-powered electric cars such as hydrogen cars, or drawing their energy directly from solar panels, will be able to alleviate the situation a little by then.