Tesla Price Hikes, Lay-Offs, Rising EV Lead Times: How Does It All Connect In A 'Tough June Quarter?'

Tesla, Inc. TSLA recently announced another round of price hikes for its electric vehicles. This comes against the backdrop of a "tough June quarter" call from CEO Elon Musk.

Giga Shanghai Mars June Quarter: COVID-19-related shutdowns in Shanghai will likely impact Tesla's June quarter deliveries by 8%, Loup Funds Managing Partner Gene Munster said in a note.

The company will also likely strike a cautionary note on the September quarter, given the macroeconomic uncertainties, the analyst said. However, the analyst expects the company to stick to its 50% plus annual growth guidance for deliveries.

While noting that Musk announced the elimination of 10% of the salaried workers and an increase in the production of hourly employees, Munster said this is an accepted approach to management. The interpretation of increased hourly production is that demand for Tesla vehicles remains healthy, he added.

Related Link: What This Tesla Analyst Makes Out Of Elon Musk's Warning Of A 'Tough Quarter'

Price Hikes: Alongside Musk's commentary that the June quarter will be a tough one, Tesla has raised vehicle prices three times since October, with the average increase being 18%, Munster noted.

The analyst expects profit and price increases to offset increasing component costs.

"Regardless of where the additional revenue will be applied to, it is unlikely that the company would raise prices for any reason if demand was softening," the analyst said.

Munster also noted that the lead times for Tesla vehicles are increasing. The average lead times for Model 3/Y vehicles, making up about 90% of total revenue, have increased 10% since April compared to 12% for the Model S/X vehicles. The lead time for the former is at 8.5 months, while for the latter vehicles, it is at 12 months.

Price Action: In premarket trading Thursday. Tesla stock was seen trading up 0.93% at $714.85, according to Benzinga Pro data.