Tesla temporarily halted production at its Shanghai factory on Saturday, starting an already unusual Christmas pause for its most productive facility one day ahead of schedule, The Wall Street Journal reported Monday, citing sources familiar with the matter.
While auto companies in China often suspend or reduce production at points during the summer or Lunar New Year, Tesla typically remains productive through Christmas, making its nine-day pause through Jan. 2, 2023, unusual, according to the WSJ. Car sales fell 9.2 percent in China in 2022, a major demand for Tesla cars have slumped globally, with the company producing 22,000 more cars than it sold in the third quarter of 2022.
The shutdown was part of planned annual maintenance, and the company denied a Reuters report from Saturday that the pause had begun ahead of schedule, Tesla reportedly told the Global Times, an outlet run by the Chinese government, on Monday.
The plant shut down for weeks this spring following a wave of COVID-19 infections and lockdowns, and a new wave of infections — following a loosening of China’s zero-COVID policy after a rare series of nationwide protests rocked the country’s authoritarian leadership — has reportedly hit car makers and dealers in the country, prompting some customers to avoid dealerships.
Anticipating further growth in the market, Tesla boosted the facility’s production capacity to 750,000 per year in July, up from 450,000, according to the WSJ. The plant is now responsible for more than half the company’s car deliveries worldwide, and those familiar do not anticipate that the shutdown will impact the automaker’s ability to fulfill orders.
Tesla’s share price has plummeted in the past 13 months, down roughly 70 percent — to just over $123 per share — since peaking in November 2021, the WSJ reported.
The struggling automaker’s shares nosedived almost 20 percent in the business week ending Dec. 23 after concerns about CEO Elon Musk’s leadership at the company rattled investors, according to The Washington Post.
The billionaire sold roughly $3.5 billion worth of shares in the company in December, and investors are concerned that he is focusing too much of his time on Twitter, which he took private in October.
Musk recently alleged that the main culprit for Tesla’s flagging stock price was the Federal Reserve, whose campaign of interest rate hikes designed to reduce inflation was driving investors away from the stock market.
“Tesla is executing better than ever!” Musk tweeted on Dec. 16, in response to a complaint by investor Ross Gerber. “We don’t control the Federal Reserve. That is the real problem here.”
Tesla did not immediately respond to a Daily Caller News Foundation request for comment.
via westernjournal
