(Reuters) -Tesla Inc again raised prices for all its car models in the United States in response to persistent global supply-chain problems and soaring raw material costs.
The electric carmaker increased its Model Y long-range price to $65,990 from $62,990, its website showed on Thursday, after delaying U.S. deliveries of some long-range models by up to a month.
The 5% price hike comes as costs of raw materials for aluminum to lithium used in cars and batteries surge, while automakers struggle to source chips and other supplies due to an industry-wide shortage.
Credit Suisse said the price hike represents in some cases the fourth one in the United States in 2022. “While some concerned price hikes will destroy demand, for now Tesla (NASDAQ:) remains supply constrained,” the brokerage said.
Tesla Chief Executive Elon Musk has previously said that lithium is responsible for cost increases and “a limiting factor” to EV growth, encouraging carmakers to get into the lithium business.
Rival Rivian Automotive Inc has also raised prices by more than $10,000 for new orders of its base model.
Rivian Chief Financial Officer Claire McDonough said on Thursday during Deutsche Bank (ETR:)’s Global Auto Industry Conference that customers were opting for the most high-end models despite the price increases.
“(That’s) leverage as we think about the world of inflation, and the pricing headroom that we believe we have for our vehicles,” McDonough said.
Several automakers are expected to deliver electric cars to customers for the first time in their race to catch up with Tesla amid growing demand.
Musk, the world’s richest person, has warned about the risk of a recession in recent weeks. He said earlier this month he had a “super bad feeling” about the economy and that Tesla needed to cut 10% of jobs.
Musk, who is in the process of buying Twitter Inc (NYSE:) for $44 billion, is expected to address the social media company’s employees later on Thursday.
Shares of Tesla were down about 9% on Thursday.