American electric vehicle maker, Tesla has increased prices on four of its electric vehicle models. The announcement was made after the firm recorded a $1.6 billion profit in its third quarter.
A source stated that the prices of base Model 3 and Model Y variants were increased by $2,000, standing currently at $43,990 and $56,990 respectively. Additionally, the cost of base Model S and Model X was raised by $5,000, at $94,990 and $104,990, respectively.
Despite the shortage of semiconductors which hampered manufacturers globally, the EV behemoth had generated outstanding revenue in the third quarter.
Earlier in June, Tesla CEO Elon Musk stated that supply chain limitations were a major factor in Tesla's further price increases for the Model 3 and Model Y in the first half of 2021. However, the business was able to update its car software to support different chips.
Other automakers, such as Volkswagen, Ford, and Toyota, have been less lucky and have taken steps like raising car pricing and temporarily closing facilities to cope with chip shortage.
Zach Kirkhorn, Tesla CFO, stated during the company's third-quarter results conference with investors that growing demand for electric vehicles caught the firm by surprise.
The price adjustments may not appear rational to the general public at times, Kirkhorn added. However, they have a plan in place behind the scenes as the firm balances supply and demand, as it attempts to balance part shortages, and control wait times. All of this is factored into the optimization process.
In other news, Tesla has revealed plan to test its Full Self Driving ADAS (advanced driver assistance system) on public roads. However, the trial with untrained car owners on public roads has received scrutiny and controversy.