In recent times, it has been tough to determine who to listen to regarding Tesla stock. This week, investors in the stock have suffered losses due to confusion regarding the company’s output in China.
Citing a memo it had read, Reuters announced on Friday that Tesla (NASDAQ:TSLA) would halt Model Y production at its Shanghai plant during the last week of December.
Bloomberg claimed earlier in the week that December manufacturing of the Model Y will decline by 20%. Still, Reuters reported that Chinese Tesla executives rejected those facts. Barron’s reached out to Tesla for comment on both reports, but the company did not provide one.
Later in the week, Bloomberg reported that Tesla was shortening the length of shifts in the Shanghai location. Barron’s request for comment from Tesla regarding that report was not met with a response.
Tesla Stock Price Affected By Conflicting Reports
The constant back and forth has not been beneficial to the stockholders. The price of Tesla shares has decreased by around 11% for the week. Over the same period, the Nasdaq Composite has experienced a decline of almost 3%.
The slowing of production at the end of the month makes sense, given that demand is likely to surge for a short period before leveling out. This is because specific Chinese EV purchasing incentives are about to expire in a few weeks. Buyers of electric vehicles generally make a mad dash to purchase automobiles right before the year’s end, when incentives begin to decrease. A late reduction in the month would indicate that the pattern will likely continue into December and January.
The market anticipates a significant month for Tesla deliveries, with more than 440,000 expected worldwide. That would set a new high watermark and bring the total number of deliveries in 2022 to within a hair of 1.4 million, which is an increase of roughly 45 percent from the previous year.
After producing more than 100,000 vehicles at its Shanghai plant during November, this result will likely occur. In addition to California and Texas, Tesla has production facilities in Germany.
Even though manufacturing and sales in the fourth quarter are crucial, Tesla is forecasted to deliver over 2 million automobiles in 2023. Reaching that figure to the stock will be of far greater importance than production at any one plant as we approach the end of the year.
During trading on Friday, TSLA had a gain of almost 0.5%. The market is looking for a way to end its losing skid of four days. Futures contracts for the S&P 500 and the Dow Jones Industrial Average are currently trading up by approximately 0.3% and 0.2%, respectively.
The price of Tesla stock was around fifty percent lower year to date as it entered trading on Friday.
Featured Image: Megapixl @ Chad Russell
