Tesla Inc's (NASDAQ: TSLA) Giga Shanghai could spring a production surprise in the current quarter as the key plant returns to production after weeks of shutdowns due to COVID-19 curbs in China.
What Happened: CEO Elon Musk told analysts on a post-earnings call that Tesla China faced significant challenges due to the shutdowns but is coming back up.
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“We did lose a lot of important days of production..a lot of suppliers lost many days of production. But Giga Shanghai is coming back with a vengeance. We will see a record output ... this quarter,” Musk told analysts.
Although Musk warned Tesla’s second-quarter production would be slightly lower than the first, he quickly added that it could “pull out a rabbit of its hat” and ensure higher output.
The world’s richest man said Tesla's production would be substantially higher in the third and the fourth quarters.
See Also: Analyst Sees Tesla Taking 8% Volume Hit In Q2 From China COVID-19 Lockdowns
Why It Matters: Tesla’s Giga Shanghai factory is gradually coming back online after being idled since the start of this month due to rising COVID-19 cases in China.
The plant, which makes the Model 3 sedan and Model Y SUV, contributed to 52% of Tesla’s global deliveries last year.
Gene Munster, founder-analyst at Loup Ventures and a Tesla bull, last week estimated the EV maker’s production could take a hit of 8% in the second quarter due to the Shanghai disruption.
Price Action: Tesla stock closed 4.96% lower at $977.2 a share on Wednesday.
Photo courtesy: Tesla
