Tesla (TSLA) production in Shanghai during April plunged 98% from March, according to The China Passenger Car Association, as the EV maker grappled with China’s severe lockdown due to rising Covid infection rates. On Tuesday, Reuters also reported that Tesla has all but stopped production at the plant due to supply snags. Tesla stock rebounded despite the negative news, as investors had already factored in the challenges.
With Shanghai in its sixth week of a shutdown, the report said Tesla planned to make fewer than 200 vehicles on Tuesday, far below the 1,200 units per day it had been able to produce in recent weeks.
Tesla reopened its Shanghai factory on April 19 after being closed for 22 days, with workers eating, sleeping and working at the plant in a so-called closed-loop system to limit exposure to Covid.
The CPCA said Tesla produced 10,757 vehicles in April, selling 1,512 of them. That’s a far cry from the 65,814 cars sold in March. Tesla did not export any made-in-China Model 3 and Model Y cars in April.
Tesla’s typically exports the bulk of its China-produced cars mainly to Europe in the first two months of the quarter, and has its strongest numbers in the third month.
The company officially opened a plant just outside Berlin on March 22, which will eventually supply much of the European market.
It’s unlikely Tesla’s second-quarter output will manage to build on its record-setting Q1 deliveries of 310,000 vehicles. FactSet now estimates Tesla will deliver 299,000 vehicles in the quarter ending in June, with revisions likely to come again as supply shortages continue to hamper production.
Overall passenger car sales in China dropped 36% year over year in April, while production fell 47%. China is a key market for automakers as it is the world’s largest. Warren Buffett-backed BYD (BYDDF) was the top seller in the overall market for April. It sold 105,000 units in April, a 138% year-over-year surge.
Meanwhile, sales of battery-electric vehicles and plug-in hybrids, which receive government incentives, rose more than 50%.
The CPCA reported sales of China-made new energy vehicles rose 52.6% year over year in April to 293,000.
The EV maker’s shares narrowed early gains to trade up 0.4% at 790.30 on the stock market today. Tesla stock is fighting to snap a three-day losing streak that saw its price plunge nearly 15%.
Shares are trading well below their 50-day and 200-day lines, amid a market downturn. Tesla’s relative strength line also took a dive. Its RS Rating is 71 out of a best-possible 99, while its EPS Rating in 78, according to MarketSmith.
Among other US-based EV makers Lucid (LCID) dropped 1.7%. Rivian (RIVN) reversed a 5% gain to a 2.3% loss, following its harrowing 21% drop on Monday. Rivian reports earnings on Wednesday.
Legacy automakers with a growing EV presence General Motors (GM) rose 0.2% and Ford (F) dipped a fraction.
Tesla’s China-based rivals Nio (NIO) also reversed lower% on Tuesday, while Li Auto (LI) jumped 3.2%, Xpeng (XPEV) shed 1% and BYD gained 1.6%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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