Elon Musk: Tesla cars may cut prices if inflation slows

Tesla CEO Elon Musk said on Friday that if inflation slows, Tesla cars may reduce prices.

Musk, who has more than 100 million followers on Twitter, responded on Friday to a tweet asking if Tesla had plans to lower prices it had raised in response to the pandemic and supply chain woes.

Musk replied: " If inflation slows, we can lower car prices ."

Tesla has raised car prices several times in the past few months, including in the two major markets of the United States and China. Several automakers have announced higher prices for their products as the cost of raw materials such as aluminum and lithium used in cars and batteries soars. Analysts at AlixPartners said higher prices for raw materials could lead to higher investment. Electric vehicles have smaller profit margins than gasoline-powered vehicles, and large battery packs cost as much as a third of the total cost of a car.

Overall, the average U.S. electric vehicle price in May rose 22 percent from a year ago to about $54,000, according to JD Power. By comparison, the average selling price of a conventional internal combustion engine vehicle rose 14% over the same period to about $44,400.

Musk has also warned of the risk of a recession in recent weeks, saying he has a "super bad feeling" about the economy.


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