Reports out of Reuters earlier today that suggested Tesla (NASDAQ:TSLA) would cut its output in Shanghai may be exaggerated. Tesla recently countered the assertions from Reuters, calling them “untrue.” Nevertheless, the news was enough to send Tesla down 7.11% in trading.
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The report, which called for Tesla to ultimately cut its production output by as much as a fifth, had a solid basis to it. Inventory levels at the Shanghai plant have spiked following an upgrade. Moreover, Tesla cut the prices on some models by as much as 9% in the region and even provided insurance incentives.
That’s not a normal move for Tesla, according to reports. Ultimately, Reuters noted that the report had two sources “with knowledge of the production plan” to support it.
Sales spiked as a result, which should allow those inventory levels to start declining. However, with China’s ongoing Zero Covid policy prompting lockdowns, there’s a growing cloud of uncertainty around when all businesses—Tesla among them—can finally get back to normal.
The electric vehicle market struggles through uncertainty. However, analysts are less concerned. Despite growing competition and potential demand shortfalls, analyst consensus calls Tesla a Moderate Buy. The consensus features 18 Buys, eight Holds, and two Sells.