Tesla Hikes Model S, Model X Long Range Prices In Both US, China: Continued Chip Shortage Woes?

Tesla Motors on Tuesday hiked prices of the long-range variants of the Model S sedan and Model X SUV in the United States and China, its two biggest markets, the company website shows.

What Happened: The Model S Long Range and Model X Long-range now both cost an extra $4,637 in China and $5,000 in the United States.

In China, the Model S Long Range is now priced at $133,117 and the Model X Range is priced at $140,857.

The Model S Long Range version is now priced at $89,990 and the starting price of Model X Long Range has been moved up to $99,990 in the United States.

Tesla is yet to begin deliveries for the Model S Long Range and has already secured a second price hike since it was launched in January. The estimated delivery time for Model S Long Range has now slipped to March-April next year from early next year, the company website shows.

The last price hikes were done in July when the Elon Musk -led company made similar increases in the two countries it counts as key markets for growth.

Earlier this year, Musk had said Tesla aims to make over 2,000 units of the Model S and Model X per week and could probably go as high as 2,400 to 2,500 units per week.

Both Model S and X electric vehicles are among Tesla’s most expensive, flagship vehicles and have recently undergone a refresh, with a new interior and exterior design along with efficiency and range improvements.

Why The Price Hikes? Musk has been blaming industry-wide supply chain issues and semiconductor shortages for the price hikes and had just last week in a post-earnings call with investors said the “global chip shortage situation remains quite serious.”

“For the rest of this year, our growth rates will be determined by the slowest part in our supply chain, which is the wide range of chips that are at various times the slowest parts in the supply chain.” Musk said.

Tesla is not alone as the global chip shortages have hit legacy automakers as well, forcing the likes ofGeneral Motors CoGM 0.07%,Ford Motor CoF 0.07%,Volkswagen AG OTCVWAGGY and others to halt productions and shift to build their most profitable models first amid record-low inventories.

Price Action: Tesla shares, which have been rising since it reported earnings last week, closed marginally up at $709.74 on Tuesday.