Part 3/12:
Lithium Price Surge: About $2,000 of the increase is due to higher lithium prices, which have fluctuated dramatically since 2021.
Manufacturing Costs: The expansion of Tesla’s new factories in Berlin and Austin also contributed to higher costs, owing to ramp-up expenses and initial inefficiencies.
James believes that these costs are temporary and anticipates a reduction back to $36,500 once both factories reach a production rate exceeding 5,000 vehicles per week. This volume milestone is crucial because it allows Tesla to benefit from economies of scale, potentially dropping costs and improving margins.