Tesla (TSLA) shares moved lower Thursday after the carmaker unveiled across-the-board price hikes for its U.S. models, indicating input cost pressures that could pressure near-term profit margins.
Shares were also likely pressured by indication the CEO Elon Musk will reiterate his desire to close the $44 billion take-private deal for Twitter (TWTR) when he meets with staff at the microblogging website later today in San Francisco.
Tesla boosted the cost of its long-range Model Y by around 5%, to $65,990, while the base cost for the Model 3 long range sedan rose $2,000 to $57,990. Model S prices were increased by $5,000 to $104,990. The changes mark the second price increase of this year and the third since last October.
Raw materials prices, as well as labor costs linked to overall production cycles, have risen steadily over the past year, while Nickel prices -- a crucial component in EV battery making -- have risen around 30% so far this year to around $25,500 per ton on the London Metals Exchange, while battery-grade lithium carbonate prices are up around 60% from early 2021 levels.
Tesla told investors in April that "the inflationary impact on our cost structure has contributed to adjustments in our product pricing, despite a continued focus on reducing our manufacturing costs where possible."
Tesla shares were marked 7.15% lower in late-morning trading Thursday to change hands at $648.95 each.
Tesla shares have fallen around 41.1% since Musk made his Twitter bid public on April 4 and have found little support since even as he closed out a margin loan linked to his Tesla shares to zero, while boosting the overall equity portion of his takeover to $33.5 billion.
The carmaker is still looking at a difficult second quarter, however, given the 22-day shutdown at its Shanghai factory, muted China-based sales owing to that country's Covid lockdowns and the impact of a likely writedown of its $1.5 billion holding in bitcoin, which has fallen some 50% since the end of March.
Estimates of Tesla's bitcoin carrying costs vary, but the timing of the purchase suggests a level of around $32,600. That value, of course, surged in the latter half of 2021, when bitcoin hit an all-time high of around $67,000, but now looks far more fragile after briefly crashing below the $25 level earlier this week.
Bitcoin prices were last seen trading 2.6% lower on the session at $21,181.54 each, a move that leaves the world's biggest cryptocurrency down 53% for the quarter.
Data last week from the China Passenger Car Association (CPCA) indicated that Tesla sold 32,165 China-made cars last month, up from a two-year low of 1,152 in April.
The Shanghai factory, which re-opened on April 19 and resumed exports on May 11, produced 33,544 cars over the month of May, a 212% increase from the previous month.
Tesla said earlier this spring that current quarter deliveries should be flat when compared to the first three months of the year, even with the multi-week shutdown of its Shanghai gigiafactory -- which made around half of the group's cars last year -- amid China's 'zero Covid' crackdown. The full-year delivery estimate stands at 1.47 million units.
