Tesla (TSLA) shares edged lower Tuesday after the clean-energy carmaker raised prices on its best-selling models in the U.S. and China for the second time in a week.
U.S. prices for all of Tesla's cars were bumped higher overnight, with the Model 3 cost increasing by around $3,500. Price hikes in China, meanwhile, will see the Model 3 increase by a total of 28,000 yuan, or around $4,400, compared to a week ago.
Tesla CEO Elon Musk noted over the weekend that both his car company, as well as his space project SpaceX, were seeing "significant recent inflation pressure in raw materials & logistics” as a result of the recent ramp in global commodity prices, which he linked to the ongoing war between Russia and Ukraine.
Raw materials prices, as well as labor costs linked to Tesla's overall production cycles, have risen steadily over the past year, while Nickel prices -- a crucial component in EV battery making -- briefly topped a record high $100,000 per ton on the London Metals Exchange before officials cancelled trading last week.
China's ongoing Covid surge, which has put more than 51 million people on some from of lockdown from authorities in Beijing, could also impact production at Tesla's Shanghai gigafactory, which is being ramped-up to produce around 1 million cars each year.
Schools in the city were closed earlier this week, in fact, while government officials asked citizens not to leave unless travel was 'absolutely necessary'.
Tesla sold around 116,360 China-made cars over the first time months of the year, according to official trade data, most of which were bound for export to markets in Europe and Asia.
Wedbush analyst Dan Ives, who carries a base target price on Tesla stock of $1,400, with a bull case target of $1,800, said China will account for around 40% of the carmaker's deliveries in 2022 and will remain a 'linchpin' in the carmaker's near-term growth.
Tesla shares were marked 0.55% higher in early Tuesday trading to change hands at $770.5 each, a move that would trim the stock's two-month decline to around 35.5%.
