Tesla’s vehicle price increases due to supply chain pressures
The price of Tesla vehicles is increasing due to supply chain pressures across the auto industry, particularly for raw materials. “Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially,” Elon Musk said on Twitter.
This was in response to a Twitter account which said “I really don’t like the direction Tesla is going raising prices of vehicles but removing features like lumbar for the Model Y…” In May, Tesla increased its Model 3 and Model Y prices, which is the automaker’s fifth incremental price increase for its vehicles in just a few months.
During an earnings conference call in April, Musk said that Tesla had experienced “some of the most difficult supply chain challenges.”, citing a chip shortage. In response to the removal of lumbar support on the passenger side in Tesla’s Model Y, Musk said “Moving lumbar was removed only in front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used.”
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Toyota and Honda shut production as Malaysia enters lockdown
Japanese automakers Toyota and Honda will shut down production in Malaysia as the nation goes into a lockdown, raising concerns that surging COVID-19 cases in Southeast Asia will disrupt global supply chains. Auto manufacturers and steelmakers will be permitted to continue operating but may send just 10% of their employees to work, while electronics, chemical and pharmaceutical companies will be limited to 60%.
The region serves as a key manufacturing hub for intermediate goods as companies shift production away from China. The surging cases are threatening to disrupt global manufacturing. Toyota, which made around 50,000 vehicles in Malaysia last year, will suspend production and sales there. Honda will also close two plants during the lockdown.
Meanwhile, a ‘hybrid’ Coronavirus with traits from the UK and India variants has been found in areas of northern Vietnam, and authorities are increasingly concerned about the threat to supply chains. Asia had endured fewer COVID-19 cases than the U.S. or Europe, until recently. The region recently reported more than 210,000 new daily infections, more than 40% of the worldwide total.
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COVID-19 surge in India hits raw materials and manufacturing across multiple industries
A wave of COVID-19 cases in India has impacted manufacturing and production across multiple industries and regions. Gap is facing a raw material shortage as a result of the outbreak. India is the ninth-largest trading partner with the U.S., accounting for 2.4% of year-to-date trade as of March 2021. Some of the most common imports from the country are organic chemicals, industrial machines, cotton apparel and pharmaceutical preparations.
As surges in cases have shifted around the world, so has the impact to manufacturing and supply chains. In February last year, Apple warned of supply constraints stemming from the outbreak in China. A month later, automakers in the U.S. and Europe announced temporary shutdowns as the pandemic spread.
The situation has also impacted pharmaceutical production. Around 80% of active pharmaceutical ingredients are produced abroad, mostly in India and China. Some manufacturers of COVID-19 vaccines have started to look to China to bolster their supply as the price of ingredients has risen significantly in India.
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