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Tesla Earnings May be Hit by Shanghai Factory Production Halt

Covid-19 related suspension of Tesla’s Shanghai factory, costs of ramping up new factories in Berlin and Texas and rising supply chain costs weigh on Tesla first-quarter earnings


Tesla Shanghai production
Elon Musk said in January that Tesla's volume growth would comfortably exceed 50% from last year, meaning that Tesla expects to deliver more than 1.4 million vehicles in 2022. Photo: Reuters

 

Tesla investors on Wednesday will keep an eye on whether the electric car company maintains its ambitious 2022 delivery target as the biggest factory, Shanghai, grapples with a Covid-19 shutdown and new plants slowly ramp up output.

Tesla reports quarterly results and analysts are also asking whether CEO Elon Musk will discuss his $43 billion proposal to buy Twitter and if he will use some of his Tesla shares to help fund the deal.

The Covid-19 related suspension of Tesla’s Shanghai factory, the costs of ramping up new factories in Berlin and Texas and rising supply chain costs are likely to have weighed on its first-quarter earnings, analysts said.

Musk said in January that Tesla’s volume growth would comfortably exceed 50% from last year, meaning that Tesla expects to deliver more than 1.4 million vehicles this year.

Tesla navigated the global supply chain crisis better than other rivals, posting record deliveries and earnings for several quarters.

But its factory in Shanghai was shut for more than three weeks, after the city rolled out lockdown measures to combat a surge in Covid-19 cases.

Tesla resumed production at its Shanghai plant on Tuesday.

 

  • Reuters with additional editing by Jim Pollard

 

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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