We’ve said it before and we’ll say it again: Teslas are more expensive than they were a few days ago. Unlike past sudden price hikes, however, this one seems particularly tied to geopolitical economic trends. As Electrek noted yesterday, the Long Range version of the Model 3, as well as both the Long Range and Performance editions of the Model Y, are getting $1,000 cost increases due to current nickel shortages directly related to the ongoing military and humanitarian crisis in Ukraine.
Nickel shortages have been a problem for electric car makers for months, but the situation took a dramatic turn for the worse following Russia’s unprovoked invasion of Ukraine last month — the former country being a major source for the metal. As the majority of Western countries move to impose sanctions, boycott exports, and cut off business ties altogether, nickel supplies are that much scarcer, and Tesla is no exception to the financial pain. Although it’s been a few months since Tesla’s last price increase (November 2021, for those of you keeping track), we expect these EV costs to continue rising as the crisis overseas becomes a protracted military conflict.
Putting it all together — While there hasn’t yet been an official statement from Tesla regarding why these models in particular are experiencing yet another price hike, Electrek notes that they are all vehicles relying on nickel within their batteries. In contrast, the base Model, “which is equipped with an iron-phosphate battery cell that doesn’t require nickel,” seems to still cost the same. Additionally, Morgan Stanley has warned that “the recent 100 percent surge in nickel price would have roughly $1,000 to electric vehicles like Tesla’s,” so... yeah, that tracks.
No end in sight — Unfortunately, it doesn’t seem like these kinds of supply chain woes will ease up any time soon. Natural resource components for EVs such as nickel will continue to be in high demand as renewable energy plays an increasing role in the global economy, and crises like the Russia-Ukraine conflict will only exacerbate these issues. Tesla costs are already high... but expect them to increase even more in the months ahead.