Tesla says it will suspend production after a shaky quarter with historic production milestones
Tesla investors have a lot to analyze after the 4th holiday season: a disappointing delivery quarter, a record month of production, and now several weeks of shutdowns at many factories. The electric carmaker will halt most production on the Model Y assembly line in Shanghai for the first two weeks of July, then halt the Model 3 line for 20 days from July 18, Bloomberg reported. believe last month. Upgrades at the plant to increase production of both vehicles are expected to be completed in early August, people familiar with the matter said.
On Monday, TeslaMag said its car factory near Berlin will be closed for two weeks starting July 11. The German website reports that Tesla aims to nearly double the rate of production since August, citing an unidentified source. The company built 1,000 Model Ys at the plant for at least a week last month.
Tesla did not mention these plans in its July 2 production and delivery statement. The automaker offered a line of optimism – it produced more cars in June than in any month in history – while revealing 254,695 deliveries for the quarter, falling short of expectations from automakers. analysis.
Philippe Houchois, a Jefferies analyst with a buy rating on Tesla stock, said in a July 3 note that is expected to be the “relative weakness” for the quarter. He wrote that the CEO Elon MuskThe company’s comments refer to the company’s new factories as “smelters” suggesting that Tesla’s free cash flow may have been affected by significant working capital disruptions.
Tesla shares fell as much as 0.7% shortly after the start of pre-market trading Tuesday.
The biggest hit to Tesla’s performance last quarter came from Shanghai’s weeks-long shutdown before the Covid outbreak. The company went to great lengths to reopen the factory there and resume operations, with thousands of workers sleeping on site to maintain partial production.
While Shanghai is Tesla’s most productive factory, its plants near Berlin and Austin, Texas, are just up and running. Musk held an opening party at the former party on March 22 and at the latter on April 7.
While those were just fun jobs — Musk danced in Germany and wore a cowboy hat and baseball caps in Texas — the CEO seemed much softer a few weeks later.
“Berlin and Austin are losing billions of dollars right now because there’s a lot of overhead and almost no output,” Musk told Silicon Valley Tesla Owners on May 31. “To Berlin and Austin working well and bringing Shanghai back to peace completely overwhelmed our concerns. “
The closure of Shanghai and the struggles to add new factories contributed to a 38% plunge in Tesla shares in the three months ended June, a record quarterly drop. The S&P 500 fell 16%, the biggest drop for a benchmark US stock index since the first quarter of 2020.
Tesla has scheduled its quarterly earnings report for July 20.
© 2022 Bloomberg LP