Inflation, exchange rates, public policy, and manufacturing efficiencies are just a few of the things that can affect the price of new cars one way or another. Elon Musk remarked that a price hike for the Tesla Model S is probably on the way for Europe in response to a weakening euro.
The Model S has had its price upwardly adjusted twice in the U.S., and will probably do so again in the near future, as there’s no reason to lower the price on a car as in-demand as the Model S. In Europe though the reasoning has more to do with a lower value euro, which has lost about 10% of its value against the dollar since the beginning of the year. As AutoBlog Green points out, this might not affect the price of a pint, but on a $70,000+ luxury automobile it can add up to big bucks. On a conference call to investors, Musk had this to say;
We’re probably going to have to adjust the price of our car in euros upwards because there has been a 7 percent change in the exchange rates of the euro versus the dollar. So we’ll periodically have to make pricing adjustments if the exchange rate band gets too wide. I would certainly encourage anyone in Europe to purchase their car soon because we probably will have to make an adjustment there.
When you factor in local taxes, which in Europe often includes a Value Added Tax, the base price of the Model S can vary by thousands, or even tens of thousands of dollars. There are also now over 50 Superchargers spread out across Europe, making travel by electric easier than ever. The threat of a price increase could push some fence sitters into the driver’s seat as well, briefly boosting demand in the Old World as well.