Tesla Expects Shanghai Production Output in Q2 to Drop by Over a Third
By Senad Karaahmetovic
Tesla’s (TSLA) assembly plant in Shanghai is expected to see its output drop by more than a third this quarter relative to Q1 as the country’s zero-COVID lockdown restrictions caused worse-than-expected damage to production.
According to a memo from Reuters, the electric vehicle maker hopes to make more than 71,000 units in Shanghai this month. After the production of 44,301 units in April, May, and then another 43,301 in May, the total output for the second quarter will be 115,300.
Tesla (NASDAQ:), produced 178 887 vehicles at its Shanghai factory in the first quarter of 2018, according to China Passenger Car Association.
Tesla’s boss Elon Musk said earlier this year that he expected vehicle production at the Shanghai plant to be in line with the first quarter.
His words at that time were, “It is also possible that we might pull a bunny out of the cap and be slightly higher.”
Many analysts have recently reduced their targets for Tesla stock prices, citing China lockdowns which will probably impact revenue and delivery numbers in Q2.
Philippe Houchois, a Jefferies analyst, has lowered Tesla’s price target to $1,050.00 from $1,250.00.
“We cut FY volume 85k units, -5% to 1,415k (52% annual unit growth) mostly on c.30 day production loss, progressive return to work by June end and slow start in Austin. Our estimates factor Q4 Shanghai running at annualized 950k, with modest FY outputs of 50/75k units in Austin/Berlin,” Houchois wrote in a note sent to clients in late May.
Tesla shares are up by 1% on Friday, pre-open.