BTIG pulled again on expectations on Nikola Corporation (NASDAQ:NKLA) after a discouraging learn at CES earlier within the month on battery costs and the upper prices of metals.

While Nikola (NKLA) introduced battery production in-house final 12 months by way of an acquisition, analyst Gregory Lewis and workforce anticipate greater prices and the restructuring of that enterprise to weigh on car production and margins within the close to time period.

“We observe on Friday NKLA introduced the closing of the legacy battery facility in California, which shall be moved to Coolidge by 3Q23. This restructuring comes on the heels of final week’s announcement by Lightning eMotors that ZEV was reducing their gross sales targets citing non supply with their battery provider who is NKLA.”

The expectation from BTIG is that NKLA may slow play production over the subsequent few quarters because it continues to work to enhance battery manufacturing margins. That outlook led BTIG to decrease its FY23 supply estimate to ~450 BEVs from ~960 BEVs and drop its income estimate dramatically. The agency additionally lower its value goal to $5 from $7 in response to the tempered outlook.

Shares of Nikola (NKLA) moved up 1.77% in afternoon buying and selling on Tuesday to $2.59 vs. the 52-week buying and selling vary of $2.01 to $11.87.

Read extra about Nikola’s current manufacturing announcement.