Tesla’s stock is down in premarket after reports revealed the company plans to extend the production cuts at its Shanghai plant in January, according to the internal schedule reviewed by Reuters. The schedule shows that the carmaker will operate for 17 days next month and stop production output from Jan. 20 to Jan. 31.
Tesla’s Shanghai Plant to Have an Extended Break for Chinese New Year
Shares of Tesla are more than 5% in premarket trading Tuesday on the reports that the electric vehicle (EV) maker is planning to run a reduced production schedule at its Shanghai factory in January, according to Reuters. The move means Tesla will be extending the production cut it implemented this month into 2023.
According to Tesla’s internal plans reviewed by Reuters, Tesla’s Shanghai plant will operate for 17 days in January from Jan. 3 to Jan. 19. The carmaker will then stop car output from Jan. 20 to Jan. 31 for an extended break for the Chinese New Year.
The US automaker did not clarify why it is reducing Shanghai output nor whether it would continue running other operations outside the assembly lines for its Model 3 and Model Y vehicles. Tesla hasn’t previously halted operations for an extended period around the Chinese New Year.
Tesla initially denied reports earlier this month that it is looking to cut production at its Shanghai factory by 20%, but it appears that the carmaker is moving ahead with its plans to pause most work at the plant in the last week of 2022. The carmaker officially shut down production at the factory on Dec. 24.
The carmaker’s decision coincides with a surge in coronavirus infections in China after the government eased its zero-Covid restrictions in the previous weeks. The move was well-received among businesses and global investors, though it has affected manufacturing operations outside Tesla. China’s zero-Covid policy had troubled Tesla several times this year, mainly when protests broke out last month in several major cities as citizens grew tired of stringent restrictions.
Tesla’s Stock Continues to Plummet as Musk Remains Focused on Twitter
Tuesday’s premarket share price drop marks another blow for Tesla’s stock, which plummeted almost 70% since the start of 2022. The decline came due to several factors, including harsh macroeconomic conditions and supply chain constraints.
But perhaps the most critical factor is Elon Musk’s acquisition of Twitter in October for $44 billion. Tesla investors have criticized the billionaire over the past few months, claiming his obsession with the social media company has negatively affected Tesla’s performance.
Tesla’s shares are down more than 55% since Musk first revealed his stake in the social media company in April. But the 51-year-old could step down as Twitter CEO once he finds a suitable replacement, he tweeted last week.
This article originally appeared on The Tokenist
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