Tesla is going to charge additionally for the two variants of the electric car Model 3 following the current global changes in raw material prices. A brand new rear-wheel drive, NCM Model 3 prices saw an increase for the third time in the same year. Tesla is charging over $1000 more than earlier for the high nickel cathode-powered variants of Model 3.
The year 2022 is becoming a mixed set of happenings for Tesla as the company increased the Model 3 prices for the third time in this year alone. The recent hike applies to the two models using nickel-based batteries, leaving the standard battery cars using LFP packs.
The cheapest Tesla car Model 3 is a popular EV model from the company and the hike hints toward the Ukraine-Russian conflict effects being the reason. The hike comes despite the company hedging nickel prices at pre-war prices.
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Price Hike Timeline
This is not the first time that Tesla has increased the price of its Model 3. Tesla’s decision to push subsequent rise comes for the third time for the same model in 2022. The rise comes after three weeks of the last hike from Tesla.
A year ago, model 3 cost around $10,000 cheaper than what is the price now after the rise. The new increased price for the Model 3 AWD stands at $55,990 now, over $1000 more.
The base model of Model 3 Tesla was launched at the promised price of $35,000. However, the base model costs about $46,990 currently. Recently, Tesla made announcements to increase the price of the other two variants yet again.
Currently, the Long Range and performance variants start from $55,990 and $62,990 with 2.8% and 1.6% increases, respectively. There is a strong possibility Tesla came with this decision after the inflation in nickel sourcing since the price increase is targeted only at the NCM powered variant.
Model 3 Price Change
Tesla’s Model 3 comes in three variants based on the range and performance. There is another difference in these variants based on the battery type. The base model of Model 3, also the cheapest, comes with LFP packs. LFP packs cost way lower than nickel batteries for electric car manufacturing.
Following are the current prices of Model 3:
- Tesla Model 3 RWD 18”: $46,990
- Tesla Model 3 RWD 19”: $48,490
- Tesla Long Range AWD 18”: $55,990
- Tesla Long Range AWD 18”: $57,490
- Tesla Performance: $62,990
Why Tesla Is Increasing The Prices?
Tesla is said to be the highest profit-earning carmaker in history, with the highest margins on the car price in the industry. However, the last few months of the volatile market, following the Russia-Ukraine conflict, saw a huge increase in nickel prices.
Tesla made a multiyear nickel supply deal with the mining giants with the price protection hedge of pre-war prices for the metal. The latest hike on the Model 3 also signals the change in the prices of the models using nickel for high performance.
Elon Musk recently tweeted about the price hike by blaming the recent inflation. Musk said, “Tesla and SpaceX are feeling considerable recent inflation pressure in raw materials and logistics”. His tweet can be seen as a sign of Tesla charging more for their cars in the coming future to make amends for the soaring manufacturing costs.
Nickel battery cells variants of Model 3 are Long Range and Performance, both prices are increased several times since the launch. Nickel sourcing has become about 62% costlier in 2022 after the Russia-Ukraine war situation driving the price hike.
The hike in prices of Model 3 is accounted to be roughly 17% per year. Experts suggest the nickel price inflation puts around $1500 in addition to the cost of the Tesla EV on an average. Therefore, the frequent increment in the Model 3 costs could be more than just nickel price shifts.
Would Tesla Hike Other Cars’ Prices Too?
Tesla’s price hikes of their Model 3 is making experts speculate on the price revision of other models from the electric vehicle leader. The current trend of Model 3 pricing could be a sign of Tesla putting the logistics and raw material challenges on their customers.
The high volume production of electric vehicles from Tesla is might change the face of the EV automobile industry. Model 3 stays the most affordable Tesla car produced by the EV leader globally. The nickel battery models recently saw several price hikes by the company claiming to deal with nickel inflation.
Tesla might revise its other model’s prices to keep its profit margins steady following the pressure of manufacturing costs. Their brand new Gigafactory Texas in Austin is expecting to produce over a whopping 500,000 vehicles annually from next year onwards.
What To Expect In The Future?
Tesla is growing rapidly with its consistent growth in the electric vehicle sector. The launch of the sixth Gigafactory recently shows the strong future that lies ahead for Tesla cars.
Elon Musk promised several new developments in the coming years in his recent Cyber Rodeo event while launching Giga Texas. Hopefully, there are some interesting announcements coming from Tesla soon.
Tesla seems to be intending to keep increasing the price of their cars to keep the profits steady. The change in the prices could also be the reason for the challenges of the supply chain or raw materials. However, the surge is significant.
Long Range and Performance variants of Model 3 from Tesla both come with NCM battery cells. The move from Tesla points toward a possible price increase on other electric models using the same high-nickel cathode battery cells.
Tesla might come up with similar price hike stickers on other variants from the company if the reason is soaring nickel prices. Watch out for all the possible hikes and future changes by Tesla in the coming times.