2024-03-06 06:08:42
Tesla’s misfortune has not come alone in China, its sales plummeted and its factory was set on fire (REUTERS / Reuters)
Tesla’s stock price fell by 10% for two consecutive days, and fell to the lowest level since May 2023, as the company released a series of bad news.
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In the early hours of Tuesday morning, Tesla’s Berlin Gigafactory halted production due to an arson attack on a substation near the factory. Firefighters were able to put out the blaze before it spread to the factory, Reuters reported.
Tesla closed down 3.9% on Tuesday, falling to about $180, its lowest closing price since May 19, 2023. Since the beginning of the year, Tesla has fallen sharply by 27.3%, and Musk has lost his position as the world’s richest man to Amazon founder Bezos.
A left-wing activist group claimed responsibility for the Gigafactory attack in Berlin. Tesla CEO Musk said on X: “It is extremely stupid to stop the production of electric cars instead of fossil fuel cars.” He specifically wrote “extremely stupid” in German. Before the attack on Tesla’s Gigafactory in Berlin, plans to expand the factory had been heavily criticized and ultimately rejected.
Tesla CEO Musk said on X: “It is extremely stupid to stop the production of electric cars instead of fossil fuel cars.” He specifically wrote “extremely stupid” in German. (REUTERS/Reuters)
Tesla’s Berlin Gigafactory can produce up to about 6,000 vehicles per week, but it may need to be shut down for a few days before power is restored to the factory.
Before Tuesday’s attack, Tesla’s stock price fell more than 7% on Monday due to sluggish shipments in China and the possibility of further price cuts due to demand issues.
According to preliminary data provided by the China Passenger Car Association through Bloomberg, Tesla reported that its Shanghai Gigafactory vehicle shipments in February were 60,365 units, equivalent to a month-on-month decrease of 16% and a year-on-year decrease of 19%. The lowest shipment level since December 2022.
Tesla’s shipments hitting their lowest level in more than a year are concerning as the company views China as a huge growth market. Even BYD, which surpassed Tesla in overall electric vehicle sales in the fourth quarter and dominates the Chinese electric vehicle market, saw its sales in February fall from 193,655 units to 122,311 units, a drop of 37%.
Goldman Sachs analyst Mark Delaney lowered Tesla’s profit forecast for 2023 and 2024, citing lower profit margins due to price cuts, which he believes will continue over the next two years. Delaney wrote that margin headwinds may be “offset by our positive view of Tesla’s industry leadership and long-term growth potential.” Delaney has a $275 price target and a neutral rating on the stock.
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