With increasing fears of higher interest rates and rising inflation to moderate sales, investors are skeptical of the auto industry. This, in turn, has impacted the stock performance of big vehicle makers.
Tesla (NASDAQ: TSLA) is one such electric vehicle maker that has plummeted about 36.7% year-to-date in the current market sell-off. The company’s CEO Elon Musk’s recent decision to acquire social networking giant Twitter (TWTR) also drove investor anxiety.
Tesla is striving to resume production at the prior levels that had been impacted by lockdowns in China. Challenges including logistics issues and insufficient workers impacted supplies of parts, which delayed resumption even though the Chinese government provided significant support.
Recently, Reuters reported that the weekly production at Tesla’s Shanghai Giga Factory has reached 70% of the level that the unit was manufacturing prior to COVID-19 lockdowns. It has been reported that Giga Shanghai has started assembling approximately 2,600 electric vehicles per day.
Interestingly, Tesla expects output to climb even further after adding a second shift of workers last week. Unfortunately, the facility was halted for 22 days due to the prolonged lockdown in Shanghai, which was reopened on April 19 in a “closed-loop system”. Under this system, employees stayed at the unit and were not allowed to go out.
Per the China Passenger Car Association, out of 10,757 vehicles made by Tesla at the end of April, 1,512 vehicles were sold.
No comments were released by Tesla.
Analysts’ Recommendation
Recently, Credit Suisse analyst Dan Levy visited Tesla’s manufacturing facility at Fremont, California. He opined that the production at the unit was improving.
Furthermore, Levy believes that production issues at the Shanghai facility caused by COVID lockdowns are short-lived.
Therefore, considering the recent pullback in the stock as an attractive entry point, Levy maintained a bullish stance on Tesla with a price target of $1,125 (48.1% upside potential).
The rest of the Street is cautiously optimistic about the stock, which has a Moderate Buy consensus rating based on 14 Buys, 10 Holds, and six Sells. The average Tesla price target of $930.55 implies 22.5% upside potential. Shares have gained 21.76% over the past year.
Investors Remain Positive
TipRanks’ Stock Investors tool shows that investors currently have a Positive stance on Tesla, with 2.3% of investors maintaining portfolios on TipRanks increasing their exposure to TSLA stock over the past 30 days.
Concluding Remarks
Despite current challenges, investors could bet on the stock based on Tesla’s current developments, price gains, high analyst ratings, and long-term prospects.
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