Tesla stock pauses amid ongoing supply chain issues
Stocks
June 29, 2022
Elon Musk is worried about many things: an “inevitable” U.S. recession, factories losing billions and a Twitter acquisition that never seems to close.
In preparation for a downturn, Tesla is cutting 10% of salaried staff and laying off 200 people in its Autopilot team.
What’s the big deal? $TSLA is down 40% since Shanghai shut down one of Tesla’s biggest production facilities.
- In 2021, Tesla’s Giga Shanghai plant delivered over half its global vehicle deliveries.
- While Chinese electric vehicle stocks jumped in the past month as Shanghai came out of lockdown — Tesla fell another 10%.
Immense pressure: Last month, Musk said its new factories are “gigantic money furnaces” losing “billions.” Tesla just can’t get enough battery supplies, and port issues in China led to more delays.
- But one thing Musk isn’t worried about is demand. Electric vehicles are in high demand with surging gas prices.
- Supply is the issue. There’s a massive backlog on its cars and in the US market, several of its models are sold out for the year.
Investors: Wall Street firms have cut earnings and delivery estimates on Tesla recently. Tesla is expected to report second-quarter delivery numbers in early July, which will give a clearer picture for investors.
