Tesla Bear Asks Elon Musk If Production Capacity Is 'Far In Excess' Of Organic Demand After Rumored Idling Of Giga Berlin

Tesla, Inc. TSLA and other electric vehicle manufacturers face a setback in Germany as the coalition government in the country decided to abruptly end an “environmental bonus” this weekend. The government had earlier plans to phase out the subsidy by the end of the year, in response to a budget crisis it faces amid a tough economic environment.

What Happened: Against the backdrop of local media reports, Tesla’s Giga Berlin plant will shut down after Dec. 22 and will not reopen until Jan. 2, 2024. The shutdown might make it difficult for the company to hit the 1.8-million-unit annual production for the year.

Following the German government’s announcement, Tesla responded with an offer to compensate buyers for the loss of the government subsidy for new Model 3/Y orders, starting on Dec. 18-31. Germany’s environmental bonus amounted to 4,500 euros ($4,917) for consumers and 2,250 euros for the automaker.

See Also: Everything You Need To Know About Tesla Stock

Is Demand Stuttering? Following the development, Tesla bear and GLJ Research founder Gordon Johnson raised questions about the demand for Tesla vehicles. Tagging Tesla CEO Elon Musk, the bearish analyst asked, “Does this mean without government handouts (or subsidies paid for by taxpayers), your current production capacity is far in excess of organic demand?”

“Any help is GREATLY appreciated?” he added.

Germany is one of the biggest markets for Tesla in Europe and is also the export hub for the region. Any demand slowdown in the region could pressure the company’s top line, and the incentives the company is lavishing on customers to push its EVs could lead to further margin erosion.

Tesla ended Monday’s session down 0.56% at $252.08, according to data from Benzinga Pro.

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