Tesla Shares Dump And Pump After Shanghai Factory Output Cut Story Refuted As “False Information”

Tesla Shares Dump And Pump After Shanghai Factory Output Cut Story Refuted As “False Information”

Update:

Tesla shares have been on a rollercoaster ride this morning. 

First, Bloomberg cited multiple sources that said the company’s Shanghai plant was set to reduce output. On that news, shares dropped more than 5%. 

Now there’s a report from the Shanghai Securities Journal denying BBG’s report — calling it “false information.” 

REPORTS THAT TESLA CUT DECEMBER OUTPUT AT SHANGHAI PLANT BY OVER 20% IS “FALSE INFORMATION” ACCORDING TO SHANGHAI SECURITIES JOURNAL CITING TESLA CHINA SOURCES

— zerohedge (@zerohedge) December 5, 2022

And now Reuters. 

And Reuters:

TESLA CHINA: MEDIA REPORT OF DECEMBER OUTPUT CUT AT ITS SHANGHAI PLANT UNTRUE https://t.co/I9125WSCFt

— zerohedge (@zerohedge) December 5, 2022

Shares have since rebounded. 

… and how long until Musk tweets about Bloomberg’s reporting?

* * * 

Tesla shares slid as much as 5% in premarket trading after a report said that slumping Chinese demand would result in lower production levels at the company’s Shanghai factory. 

Bloomberg sources said Tesla’s Shanghai factory is preparing to reduce production by 20% from full capacity, the same as the factory ran between October and November.

Shares of Tesla fell 4.55% to $186 premarket around 0730 ET. 

Bloomberg noted:

The trimming marks the first time Elon Musk’s EV maker has voluntarily reduced production at its Shanghai plant, with previous reductions caused by the city’s two-month Covid lockdown or supply chain snarls. 

Recent price cuts and incentives such as insurance subsidies, along with shorter delivery times, suggest demand has failed to keep up with supply after an upgrade doubled the plant’s capacity to about 1 million cars a year.

Shanghai factory produces around 85,000 vehicles per month during full production. But demand is heavily waning as price cuts and incentives such as insurance subsidies fail to attract new customers. Short delivery times are another sign that Model 3 and Model Y demand slumps. 

“Without more promotions, new orders from the domestic market will likely normalize to 25,000 in December,” Junheng Li, chief executive officer of equity research firm JL Warren Capital LLC, wrote in a note last month, adding current production couldn’t entirely be absorbed by exports. 

Tesla faces increased competition from local EV companies, such as BYD Co. and Guangzhou Automobile Group.

Bloomberg failed to point out that the planned production cut comes ahead of the Chinese New Year. Most factories shutter production lines, and workers are sent home for about two weeks. 

Bloomberg data from this morning also shows that the company’s Gigafactory in Shanghai delivered 100,291 vehicles in November, marking a new monthly high. 

Cumulatively, the factory has produced more than 650,000 vehicles in the first 11 months of this year and its sales are predicted to reach 750,000 for the year.

That figure would far exceed last year’s production of 484,130.

Tyler Durden
Mon, 12/05/2022 – 08:35

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