Automakers such as Tesla and Cadillac are hiking electric vehicle prices in response to rising commodity costs like key materials needed for EV batteries.
Projections show a sharp increase in demand for battery minerals over the next four years could push the price of EV battery cells up by more than 20 percent — further exacerbating rising prices resulting from supply-chain disruptions caused by COVID and the Russia-Ukraine conflict, CNBC reported.
Elon Musk’s Tesla has worked for years to lower the costs of its vehicles to promote a global shift to zero-emissions transportation. But it raised prices several times over the last year, including twice in March after Musk warned about "significant recent inflation pressure" in raw materials prices and transportation costs.
The cheapest version of Tesla’s most affordable vehicle, the Model 3, now starts at $46,990 in the US, up 23 percent from $38,190 in February 2021.
Rivian, another American automobile manufacturer specializing in electric vehicles, announced in March that prices for their R1T pickup and R1S SUV would increase in prices effective immediately.
The RT1 jumped 18 percent to $79,500, with the R1S jumping 21 percent to $84,500.
While smaller manufacturers seem to have been hit the hardest, global name brands like General Motors have issued small raises in prices as well.
The Cadillac Lyriq crossover EV rose in price by $3,000 on Monday to $62,990.
The price hike comes as Democrats tell Americans who are concerned with skyrocketing fuel prices to purchase electric vehicles.
During a White House event on "clean transit" in March, Transportation Secretary Pete Buttigieg and Vice President Kamala Harris said exactly that.
"Clean transportation can bring significant cost savings for the American people as well,” Buttegieg said.
Harris said: "Imagine a future, where the freight trucks that deliver bread and milk to our grocery store shelves and the buses that take children to school and to work, imagine all the heavy duty vehicles that keep our supply lines strong and allow our economy to grow, imagine that they produced zero emissions."
Biden's Climate Czar John Kerry has said "we're only gonna have electric vehicles if we meet our goal by 2035."