Electric vehicle (EV) maker Tesla (NASDAQ:TSLA) suspended production at its Shanghai Plant on Saturday, Reuters reported citing an internal notice and people familiar with the matter. The company canceled the morning shift at the factory and told its workers that they could start their break, though the reason was not specified.
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Earlier this month, Reuters reported that Tesla would suspend Model Y production at the Shanghai plant from December 25 to January 1 as part of its plan to slash the production of the best-selling model by 30% this month.
The production halt at Tesla’s most productive manufacturing plant comes amid the alarming rise in COVID-19 cases in China. Zhejiang, a large industrial province near Shanghai, is facing about a million new COVID-19 cases per day, a number that is expected to double in the days ahead, according to the provincial government.
Tesla has been offering discounts to clear the excess inventory levels at the Shanghai plant and improve its deliveries. The worsening COVID-19 situation in the country is impacting the demand for EVs in China. Tesla’s price cuts helped its Shanghai factory deliver 100,291 vehicles in November, up nearly 40% from October (as per CnEVPost).
Is Tesla Stock a Buy, Sell, or Hold?
Wall Street is cautiously optimistic about Tesla stock, with a Moderate Buy consensus rating based on 19 Buys, 10 Holds, and two Sells. The average TSLA stock price target of $272.41 implies 121.2% upside potential. Tesla stock has plunged 65% year-to-date due to Musk’s Twitter adventure and growing fears about a slump in EV demand due to a potential recession.
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