EV Prices to soar as Raw Material Prices rise.

[Regularmache]

Tesla increasing up to $6k per vehicle. Can battery components find savings

https://electrek.co/2022/06/15/tesla-tsla-increases-electric-car-prices-across-lineup/

https://fordauthority.com/2022/05/f...v-materials-may-require-vertical-integration/

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[dbsb3233]

At the risk of stating the obvious... this is what high inflation looks like. It's everywhere. Even those things not directly affected quite as much end up getting indirectly affected by things like the cost of diesel to transport it and the raw materials to make it.

This is getting ugly.

 

[RickMachE]

I expect that when 2023 Mach-E orders open in late summer, the price will have gone up at least $5,000 if not more.

 

[Regularmache]

I expect that when 2023 Mach-E orders open in late summer, the price will have gone up at least $5,000 if not more.

You could be correct, and the CFO probably was alluding to that when he said MachE is not making a profit. The supply constraints on Chips and Batteries especially, they could sell 150,000 worldwide but cant produce them as the parts shortage.

 

[yngwenli]

Only good thing with inflation is it finally benefits savers/retirees a lot? Social Security will be going up. iBonds are probably going to stay high for a while, CDs/etc will go up, but banks still pay pennies on them.

 

[ZuleMME]

Tesla price hikes certainly have a lot to do with the fact they are 12 months out or so. So if prices next year cost them $5k more then need to lock in higher prices on the orders placed today for the cars that will be built then.

 

[dbsb3233]

Only good thing with inflation is it finally benefits savers/retirees a lot? Social Security will be going up. iBonds are probably going to stay high for a while, CDs/etc will go up, but banks still pay pennies on them.

Just the opposite, really. Returns on "safer" investments are only marginally higher (if at all), not coming anywhere close to keeping up with inflation. There's almost no good alternative investments right now. Stocks and bond funds are both getting clobbered. And moving it to cash means losing >8% to inflation.

That's the exact boat I'm in right now, retired and living 100% off savings/investments. I'm delaying SS to age 70 (no other pensions). I've got a sizeable nest egg, but there's just nowhere good to put it right now.

Even though it was quite expensive, I'm very glad we bought the Mach-E last year. Not only will the purchase price likely be going higher, the fuel savings is significant at the moment.

 

[Regularmache]

Just the opposite, really. Returns on "safer" investments are only marginally higher (if at all), not coming anywhere close to keeping up with inflation. There's almost no good alternative investments right now. Stocks and bond funds are both getting clobbered. And moving it to cash means losing >8% to inflation.

That's the exact boat I'm in right now, retired and living 100% off savings/investments. I'm delaying SS to age 70 (no other pensions). I've got a sizeable nest egg, but there's just nowhere good to put it right now.

Even though it was quite expensive, I'm very glad we bought the Mach-E last year. Not only will the purchase price likely be going higher, the fuel savings is significant at the moment.

Not sure if you have solar or what your electricity costs are, but there could be returns there. I think we all feel you.

 

[dbsb3233]

Not sure if you have solar or what your electricity costs are, but there could be returns there. I think we all feel you.

I checked into it but the numbers were actually worse since our electricity is pretty cheap. My incremental rate is just 10c/kWh, and that's 24x7, not TOU limited.

Also, being retired we don't drive many miles around home. I only charge the Mach-E at home maybe 3 times a month, so it barely shows up on our electric bill. We do have a demand charge for the peak 15 minutes on our bill, so I lowered my Grizzl-E to just 24kW which helps lower that peak.

We do a lot of road trips though. That's about 2/3rds of our total miles.

 

[RickMachE]

Only good thing with inflation is it finally benefits savers/retirees a lot? Social Security will be going up. iBonds are probably going to stay high for a while, CDs/etc will go up, but banks still pay pennies on them.

Yes, and no.

Retirees put a good portion of their holdings into bonds. Right now, while bond yields are up, prices are down. Prices down impacts principal. Vanguard Total Bond Fund's price on 11/1 was $11.24. Last Friday it closed at $9.89. That's a 12% drop in value. If held until the bonds in the fund mature, yes, the principal value will return. However, if one had to sell a bond fund holding, they'd have a loss right now.

 

[SWO]

Tesla price hikes certainly have a lot to do with the fact they are 12 months out or so. So if prices next year cost them $5k more then need to lock in higher prices on the orders placed today for the cars that will be built then.

Pretty sure only 1 model (Y?) is a year out. I know Kyle from out of spec got a Tesla Plaid in a few weeks apparently...........

 

[ARK]

At the risk of stating the obvious... this is what high inflation looks like. It's everywhere. Even those things not directly affected quite as much end up getting indirectly affected by things like the cost of diesel to transport it and the raw materials to make it.

This is getting ugly.

I wouldn’t take Tesla statements at face value. They are smart about doing things in a way that will keep their customers happy - perception is very important.

Reality is their self-reported profit per vehicle is through the roof. This isn’t a company just fighting to make any profit as material costs surge. No, they have never ever had a better year in terms of how much money they make off of each and every vehicle they sell.

It’s much better for them to spin it as inflation (which to be sure exists, but isn’t raising anyone else’s price by $15,000 per vehicle in a year and a half).

Basically, it’s like the hole in the wall restaurant that used to have cheap and great food, they got ‘discovered’, and now they are among the most expensive places in town.

 

[yngwenli]

Yes, and no.

Retirees put a good portion of their holdings into bonds. Right now, while bond yields are up, prices are down. Prices down impacts principal. Vanguard Total Bond Fund's price on 11/1 was $11.24. Last Friday it closed at $9.89. That's a 12% drop in value. If held until the bonds in the fund mature, yes, the principal value will return. However, if one had to sell a bond fund holding, they'd have a loss right now.

Yeah, buying bond "funds" is risky because of this risk (redemptions/forced sales/etc). Buying individual bonds gives you full control where you can hold to maturity. Newly issued bonds will have a higher interest rate though and can be held to maturity at the higher rates now.

As someone else stated, everything is getting clobbered (stocks/inflation), but I think it's still a bigger benefit for savers overall since social security will go up, their spending, even though it's ramping up like crazy, can be self controlled honestly and people don't have to buy everything if they don't need to. Healthcare sorta the exception.

We drive EVs, gas prices can go higher and has less effect on some of us if we don't drive much or near 100% drive the EV and have solar. Food? Up a ton too like everything else, but someone can make adjustments.

 

[yngwenli]

I wouldn’t take Tesla statements at face value. They are smart about doing things in a way that will keep their customers happy - perception is very important.

Reality is their self-reported profit per vehicle is through the roof. This isn’t a company just fighting to make any profit as material costs surge. No, they have never ever had a better year in terms of how much money they make off of each and every vehicle they sell.

It’s much better for them to spin it as inflation (which to be sure exists, but isn’t raising anyone else’s price by $15,000 per vehicle in a year and a half).

Basically, it’s like the hole in the wall restaurant that used to have cheap and great food, they got ‘discovered’, and now they are among the most expensive places in town.

Them raising prices also puts a lot of pressure on folks to "get in" before it goes up again. This drives instant demand to not miss the boat/next price increase and there is sure Tesla used car prices keeping their value.

Even though the MY is up $15k+ since 2021 start, people are still putting deposits (I think it's non-refundable) on the MY even today. There is no shortage of people wanting to buy them at the increased price.

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