Electric Cars Will Become More Expensive After GM, Tesla, and Ford Announce New Price Increases

GM, Tesla and Ford Raised The Prices of Their Electric Cars Due to The High Costs Charged for Commodities. New Battery Technologies May Drive Reduction Soon.

The rising gasoline prices are leading more people to switch to “the electric side.” However, electric car buyers are also facing some challenges. Besides the range issue, which is still insufficient for long trips, consumers must contend with a price shock at dealerships. Companies like GM, Ford, and Tesla are raising the prices of electric cars, mostly to offset the rising costs of materials used in batteries.

GM Adds US$ 6,200 to The Final Price of Its Electric Cars

Executives from GM, Tesla, and Ford are capitalizing strongly on consumer interest in electric cars, as the new wave of “plug-in” models gains greater presence in the market.

In recent months, Tesla, General Motors (GM), Ford Motor, Rivian Automotive, and Lucid Group have increased the prices of some of their electric cars. Last week, General Motors (GM) added US$ 6,250 to the price of its electric GMC Hummer trucks, which now range from US$ 85,000 to US$ 105,000, citing increased logistics and commodity costs.

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The waiting list for the recently launched vehicle is approximately two years, according to a company spokesperson. Still this year, Tesla has adjusted the prices of one version of the Model Y SUV three times, adding about 9% to the cost, which is now US$ 69,900, according to data from Bernstein’s Research.

Electric Car Prices in The United States Rise 22%

Generally, the average prices paid for electric cars in the United States in May rose 22% compared to the same period last year, to around US$ 54,000, according to J.D. Power.

To give an idea, the average paid for an internal combustion vehicle grew 14% during the same period, to about US$ 44,400. GM, Tesla, and Ford claim they are raising the prices of electric cars to compensate for a recent increase in raw material costs being included in the electric models.

This is by far the most expensive component of an electric vehicle and also the main key to resolving all the “deadlocks” of this type of vehicle. Prices of lithium, cobalt, and nickel have basically doubled since the onset of the COVID-19 pandemic, according to the consulting firm AlixPartners LLP.

Lithium Prices May Reduce The Value of Vehicles from GM, Tesla, Ford, and Other Automakers

The mines responsible for nickel and cobalt production have not been able to keep up with industry demand and have caused delays in the advancement of research in the sector.

With prices skyrocketing, even combustion car batteries are becoming more expensive, as well as for laptops and other common electronic devices at home that contain lithium in their composition.

Experts say that the prices of these components may continue to rise this year if commodities are not controlled, but the situation could be reversed with the use of technologies.

Steel has an accumulated decrease of 28% and iron 33% over the last 12 months. However, this price variation is not sufficient to control market volatility and the insecurity generated by the war between Russia and Ukraine.