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

Market News and Data brought to you by Benzinga APIs
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsNewsGuidanceelectric vehiclesElon MuskEVs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!