Tesla Increases Price of Some Models

Tesla has increased the base price of the Model 3 Standard Range Plus by $500 to a base price of $39,690. The base price of the Model Y Long Range AWD is now $51,690.

The Model Y Performance’s base price remains at $62,190. Although nothing seems to have changed about it, Tesla’s ability to ramp up manufacturing of this model is being impacted by delays in regulatory approval of Gigafactory Berlin, which the company has expressed frustration with. It filed for final approval 16 months ago and had gotten no information on the regulators’ decision or any timeline for making that decision.

For the Model 3, every color but white adds at least a $1,000 premium to the base price. The company charges a $2,000 premium for the color red. Tesla made some minor changes to the interior, such as a new door trim that matches the dashboard. The car is pretty much the same under the hood.

Because Tesla doesn’t have a PR department, it hasn’t commented on why it increased the base prices on some of its models so soon after reducing them earlier this year. Some experts have theorized that, like many automakers with electric vehicle models, Tesla is being affected by a shortage in semiconductor chips for vehicles.

Other automakers like General Motors have put some of their manufacturing plants in idle due to the semiconductor chip shortage. The Biden Administration may also discuss the shortage and its impact on the automotive industry in its upcoming summit on semiconductors. The summit is, however, unlikely to resolve the semiconductor chip shortage. The automotive industry has been leaning on their suppliers to ramp up production for months with only limited success.

Possible shortages in parts made by third party manufacturers may explain why Tesla and CEO Elon Musk are so interested in controlling as much of the vehicles’ supply chain as possible. Tesla has especially invested in making its own batteries and has also acquired stakes in battery makers like LG Energy Solution and German ATW Automation. These investments have allowed Tesla to more directly control processes, which allows for a more direct say in innovations such as the creation of a more efficient battery making process that uses less water than it previously did.

Tesla has briefly suspended manufacturing for the Model 3 and Model Y, possibly to complete upgrades to the Gigafactories that manufacture them. This impacted its ability to deliver vehicles despite having set a new quarterly record for vehicle deliveries in Q1 2021. Although it appears nearly ready to begin manufacturing these two models at operational Gigafactories again, deliveries can still take up to 12 weeks.

Although Tesla has recently had an issue with double-charging buyers of electric vehicles (and issued refunds after getting some bad publicity over it), those thinking about getting an electric vehicle may want to keep a close eye on the price to see if they can sneak in a bargain with the rapidly changing prices. Tesla vehicles that hold together with very few of the safety issues noted in last year’s Consumer Reports Auto Reliability Survey tend to hold their value pretty well.

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