Photo: Tesla Media
A rumored planned shutdown at Tesla's Giga Shanghai took effect Saturday as the company told workers they could begin their break.
The break was confirmed by a couple of unnamed sources, and an internal company notice was seen by Reuters. There was no specific reason for the shutdown. However, several factors are currently at play at the company's most productive facility in its second-largest market.
First and foremost, the company was thought to have planned to idle Model Y production from December 25 to January 1 because of an increase in inventory levels as the Chinese car market began to slow. In fact, in the last week, Giga Shanghai was making models for export, and the shutdown appears to be part of a plan to cut production by 30%.
Secondly, since China eased its zero-Covid policy, the country has seen an increase in infections, including among workers and suppliers at Giga Shanghai.
The factory has had its up and downs this year as the Covid lockdowns limited production earlier in the year, but the facility finished the year on a tear as the 20,000-plus workforce increased production of its Model 3 and Model Y vehicles by over 70% in the third quarter.
The ebb and flow at Giga Shanghai is a reflection of what is taking place throughout the world's largest electric vehicle maker in terms of market capitalization. Since Elon Musk purchased Twitter in late October, rumors that he has been consumed by turning the social media platform around and has not been able to focus on Tesla have run rampant.
That may be the case, but Musk did not build Tesla without the help of a slew of operations and management experts who are largely still in place.
Tesla stock has taken a beating as it is now the fourth worst performing stock S & P 500 of 2022 in terms of market-value decline. With one week left in the year, Tesla stock is down by 61%, closing at $123.15 on Friday. Investors were spooked by the China shutdowns earlier in the year, the aforementioned increase in inventory, Musk's stock sales, and most recently by the company's discounts on models in the U.S., seen as a desperate move by Wall Street.
While the EV market has gotten a bit crowded as most car makers have committed to EV production, Tesla's grip on the market may not be as tight as it once was, but 2022 was not that bad of a year in terms of sales. The company has four giga-factories building all-electric vehicles on three continents and sold over 3.2 million vehicles as of October. The one from Shanghai was suspended on December 24. With the increase in competition and production of the long-awaited Cyber truck, 2023 may prove to be a pivotal year for the company.
First and foremost, the company was thought to have planned to idle Model Y production from December 25 to January 1 because of an increase in inventory levels as the Chinese car market began to slow. In fact, in the last week, Giga Shanghai was making models for export, and the shutdown appears to be part of a plan to cut production by 30%.
Secondly, since China eased its zero-Covid policy, the country has seen an increase in infections, including among workers and suppliers at Giga Shanghai.
The factory has had its up and downs this year as the Covid lockdowns limited production earlier in the year, but the facility finished the year on a tear as the 20,000-plus workforce increased production of its Model 3 and Model Y vehicles by over 70% in the third quarter.
The ebb and flow at Giga Shanghai is a reflection of what is taking place throughout the world's largest electric vehicle maker in terms of market capitalization. Since Elon Musk purchased Twitter in late October, rumors that he has been consumed by turning the social media platform around and has not been able to focus on Tesla have run rampant.
That may be the case, but Musk did not build Tesla without the help of a slew of operations and management experts who are largely still in place.
Tesla stock has taken a beating as it is now the fourth worst performing stock S & P 500 of 2022 in terms of market-value decline. With one week left in the year, Tesla stock is down by 61%, closing at $123.15 on Friday. Investors were spooked by the China shutdowns earlier in the year, the aforementioned increase in inventory, Musk's stock sales, and most recently by the company's discounts on models in the U.S., seen as a desperate move by Wall Street.
While the EV market has gotten a bit crowded as most car makers have committed to EV production, Tesla's grip on the market may not be as tight as it once was, but 2022 was not that bad of a year in terms of sales. The company has four giga-factories building all-electric vehicles on three continents and sold over 3.2 million vehicles as of October. The one from Shanghai was suspended on December 24. With the increase in competition and production of the long-awaited Cyber truck, 2023 may prove to be a pivotal year for the company.
Google News