Japan’s Toyota warned today that “rising material prices” will affect its profits, while Tesla’s CEO Elon Musk hinted that his company could slow down the acceptance of new orders.
Toyota predicts a 21% drop in profits this year, blaming an “unprecedented increase in material and logistics costs.”
Separately, Musk said at the conference that supply chain problems could force Tesla to stop accepting new orders.
“The frustration we see from customers is that we can’t get them a car,” he said at the FT event.
“We’re actually probably going to stop taking orders after a certain period of time because some of the deadlines remain after a year.”
Many of the world’s largest automakers have recently been forced to close Chinese production facilities after the Covid blockade, leading to a shortage of parts and increased delivery times for cars. This week, Tesla warned of disruptions to its largest factory in Shanghai.
The problems have been exacerbated by the sharp rise in prices for raw materials such as nickel, which is important for the production of car batteries. Since the beginning of the year, nickel prices have risen by 45% amid trade restrictions Russiathe world’s third largest metal producer.
The global shortage of semiconductors caused by the shutdown at the start of the pandemic is also affecting the industry.
British Motor Show Vertu warned today that “cash supply of new cars” would be a key factor in its performance this year.
Vertu has sounded cautious, even as it announced record profits for the year that has just ended. The company reported profits of just around £ 2 billion for the year to February 2022, despite a 15% reduction in car sales.
“Consumers are increasingly taking a long lead time,” the company said.