Elon Musk says electric carmaker Tesla and rocket company SpaceX both face ‘significant’ inflationary pressures amidst Ukraine conflict
Entrepreneur Elon Musk has said his companies Tesla and SpaceX are seeing “significant” inflationary pressure affecting raw materials and logistics.
After linking to an article saying that Russia’s invasion of Ukraine has sent commodity prices to their highest level since 2008, he added in a Twitter message, “And we are not alone.”
He asked users about their forecasts for inflation over the next few years and remarked that he “won’t sell” his holdings in cryptocurrencies such as Bitcoin, Ethereum and Dogecoin.
The conflict has seen soaring prices of metals used in cars, including steel and aluminium, palladium for catalytic converters and high-grade nickel for electric vehicle batteries.
Western countries have not yet imposed sanctions on metals, but many shippers and auto-parts suppliers are shunning Russian goods.
Car makers are already struggling with a shortage in microprocessors and higher energy prices.
Rising prices for housing, food and fuel drove the US consumer inflation index to its steepest jump in four decades, fuelling expectations of a Federal Reserve interest-rate increase.
Tesla’s shares have lost about 25 percent of their value in the year to date.
Last week the company raised US prices of its Model Y SUV Model 3 Long Range sedan by $1,000 (£767) each and prices of some Model 3 and Model Y vehicles in China by 10,000 yuan (£1,209).
Tesla & SpaceX are seeing significant recent inflation pressure in raw materials & logistics
— Elon Musk (@elonmusk) March 14, 2022
Rival electric vehicle maker Rivian said last week that higher raw material prices and other supply-chain constraints could see its planned annual production cut in half, while Toyota said it would reduce production in Japan by 20 percent to ease the strain on suppliers.
Bitcoin is down nearly 20 percent in value so far this year, but Musk said on Twitter, “I still own & won’t sell my Bitcoin, Ethereum or Doge”.
Musk helped send Bitcoin to an all-time high last May when he announced Tesla would accept it as a form of payment for vehicles, before suspending the offer following complaints about the cryptocurrency’s high carbon footprint.
Musk also said at the time that Tesla had acquired some $1.5bn in Bitcoin, but it isn’t known how much he personally holds in cryptocurrencies.