Tesla quietly raised prices of four of its electric vehicles this weekend, a few days after the automaker announced a record $1.6 billion profit in its third quarter. First reported by Electrek, the base Model 3 and Model Y electric vehicles are each priced $2,000 higher, at $43,990 and $56,990 respectively. In addition, the base Model S and Model X vehicles will each cost $5,000 more, at $94,990 and $104,990
Tesla had a banner third quarter despite the global semiconductor shortage that has plagued other carmakers. Tesla CEO Elon Musk said in June that Tesla’s incremental price hikes on the Model 3 and Model Y during the first half of 2021 were due in large part to supply chain shortages. But the company was able to rewrite its vehicle software so it could support alternate chips.
Other automotive companies, including Volkswagen, Ford, and Toyota have not been as fortunate, taking measures like increasing vehicle prices and temporarily shuttering factories to try to weather the chip shortage.
Tesla hasn’t offered an explanation for the latest price hikes, but company CFO Zach Kirkhorn said during its third quarter earnings call with investors that the increased demand for electric vehicles “caught us a little bit off guard.”
“Sometimes, to the public, our pricing changes may not seem to make logical sense,” Kirkhorn said. “But, you know, there is a strategy that we work behind the scenes as we’re balancing supply and demand, as we’re also trying to balance various shortages on parts, as we’re trying to manage wait times. All of that goes into the optimization here.”
Update October 24th 2:04PM ET: Added more detailed quote from Tesla CFO.