Tesla Stock Broke a 3-Day Losing Streak Last Week. Why It’s Dropping Again.
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Brand new Tesla cars sit are displayed at a Tesla dealership in Corte Madera, California.
Justin Sullivan/Getty Images
Tesla stock is falling again Monday after breaking a three day losing streak this past Friday. The company’s new plant in Germany looks like it won’t be producing when CEO Elon Musk hopes. It isn’t great news for the stock, but the reported delay amounts to weeks.
Tesla
(ticker: TSLA) stock is down 2.1% to $694.38in Monday morning trading.
S&P 500
and
Dow Jones Industrial Average
futures are both up roughly 0.6%.
The German news outlet Automobilwoche, which is part of the Automotive News, reported Sunday that Tesla will need another six months to get its so-called gigafactory, which is now under construction in Berlin, up and running. Tesla dubs its new facilities gigafactories.
Tesla has two auto-manufacturing plants, and two more on the way. The company’s original facility is in Fremont, Calif., and was purchased from General Motors (GM) more than a decade ago. Tesla’s Shanghai facility started production around the beginning of 2020, and recently started shipping a Chinese-built Model Y crossover vehicle.
Tesla also has a gigafactory in Nevada that makes batteries. The two Tesla facilities under construction—apart from the one in Berlin, there’s one in Austin, Texas—had been set to start up later in 2021.
“Both Texas and Berlin are progressing well, and we expect to have initial limited production from those factories this year and volume production from Texas and Berlin next year,” said Musk on the company’s April 26 earnings conference call.
His comments were about a week prior to the Automotive News story. It looks as if limited German production might be moving from late 2021 into early 2022.
The reasons for the delay aren’t immediately clear. Tesla didn’t respond to a request for comment about the German plant. There is a global semiconductor shortage that is constraining the production of cars and other products. There is also the potential for constraints on the battery-manufacturing side. Battery makers are trying to ramp up production to keep up with all the new EVs being launched.
There are also reports regarding more scrutiny from German authorities about construction practices. But it isn’t clear what company is building the gigafactory. Tesla didn’t respond to a request for comment about construction oversight, either.
In the end, bullish Tesla investors are used to Musk being overly optimistic about timelines and milestones. Bearish Tesla investors are used to the same. If vehicles start rolling off a German line in early 2022, the stock shouldn’t be impacted that much.
Write to Al Root at [email protected]
