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Tesla (TSLA) -4% after Elon Musk’s cost inflation warning
Tesla (TSLA) shares traded 4% down on Monday after CEO Elon Musk said that the company was seeing “significant recent inflation pressure” in a new tweet.
Tesla’s (TSLA) shares dipped 4% in Monday’s trading after Elon Musk said that the electric car company was currently experiencing “significant inflation pressure” in relation to logistics and acquiring raw materials.
Tesla’s CEO highlighted the struggles in a new tweet posted early on Monday (14th March), which might not be a huge surprise to investors but is certain to increase concerns about the company’s earnings in 2022.
Musk’s candid tweet comes amid a downward spiral for Tesla stock after shares tumbled 5% on Friday to extend its year-to-date decline to 25%.
After a meteoric rise for TSLA, shares are now 36% lower than their all-time high recorded in November when it was being bought and sold for $1,243.
Late last year, Tesla became one of the few companies to have attained a $1tn market valuation, but it is now worth quite a bit less at around $796bn.
Investors were heading to the sidelines on Monday following Musk’s tweet, which again highlights the growing cost pressures facing big companies.
For Tesla specifically, the 70% rise in the cost of a basket of metals since 1st January will make it more expensive to manufacture the batteries it uses in its electric vehicles.
Tesla has not added further context about Musk’s tweet or commented on how higher inflation could impact its bottom line during the coming months.
However, reports have stated that the Austin, Texas-based company is finding it difficult to increase the scale of production of its larger cell batteries.
Investors may also be appraising EV stocks after rival NIO (NIO) slumped 14% on the stock market last week.
By late afternoon on Monday, Tesla’s shares were 3.64% down at $766.37.
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