Barron's: Auto Makers Have Inflation Problem

Barron’s headline: Tesla Has an Inflation Problem. So Do All the Car Makers.
By Al RootFollow
Updated June 17, 2022 8:22 am ET / Original June 17, 2022 5:35 am ET

Inflation isn’t a Tesla-only problem. All new cars are more expensive, whether gasoline- or battery-powered. The U.S. consumer price index for new car prices has risen about 15% since the start of 2021.

Sticker prices are probably up more than 15%. CPI data includes so-called hedonic adjustments. Prices get adjusted for new-car quality. A brand new car that costs about $40,000 today might have retailed for $32,000 a year ago. That’s a 25% increase. But the newer car might include heated seats and more advanced driver-assistance functions as standard, so economists adjust the increase to say about 15%.