• Tesla raised its prices in the US and China after Elon Musk said the EV maker and SpaceX are both feeling inflationary pressure. 
  • Musk asked his 77.9 million Twitter followers earlier what their thoughts were on the "probable inflation rate" for the coming years. 
  • Nickel, a key component in electric vehicle manufacturing, has seen unprecedented price spikes. 

Tesla raised the prices of electric vehicles sold in the US and China on Tuesday as costs for key commodities like nickel surge. 

The EV maker also raised prices five days ago for its Model 3 and Model Y vehicles, making this the second hike within a week. 

The latest price increase comes after CEO Elon Musk said over the weekend that inflation is hitting Tesla and SpaceX. He posted a question to his 77.9 million Twitter followers asking what they thought about the "probable inflation rate" in the coming years. 

Billionaire and "Shark Tank" investor Mark Cuban responded to Musk's question, saying low interest rates and speculation play roles in inflation.

Once there's less uncertainty, short sellers will help drive prices back down and markets will normalize, he added.

 

Musk also tweeted a link to a Financial Times report over the weekend on how global commodities from oil to wheat are on track for the biggest weekly rally in decades. 

Last week the price of nickel — an integral component of EV manufacturing — soared over $100,000 in a short squeeze, forcing the London Metal Exchange to halt trading. The LME announced that it will resume nickel trading on Wednesday with price caps in place.

Fresh COVID lockdowns in China also present potential supply chain snags. Experts say additional virus-containment measures overseas will weigh on imports and exports as well as raise shipping prices. 

Musk's inflation warning comes as the Federal Reserve meets Tuesday and Wednesday, with markets widely expecting policymakers to begin a cycle of interest rate hikes.

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