Elon Musk Says Tesla Giga Shanghai Returning 'With A Vengeance' After COVID-19 Halts, Sees Record Q2 Output

Elon Musk Says Tesla Giga Shanghai Returning 'With A Vengeance' After COVID-19 Halts, Sees Record Q2 Output

Tesla Inc's 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.

See Also: How To Buy Tesla (TSLA) Stock

“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

Posted In: electric vehiclesElon MuskEVsEarningsNewsGuidance