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Tesla (TSLA) stock angled lower in premarket action Thursday amid reports the EV giant is reducing worker shifts and pausing new employee onboarding at its Shanghai factory. Tesla shares have shed 11% on the week, pressured by reports of production cuts in China.
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Bloomberg reported Monday that employee shifts at Tesla’s Shanghai factory will be cut to two 9.5-hour shifts per day, compared to the current two 11.5-hour shifts. The new policy could be implemented by Dec. 12, according to Bloomberg.
This report follows stories from both Bloomberg and Reuters on Monday that Tesla is planning to cut its EV production in China, as demand seems to be faltering.
However, Tesla quickly refuted those reports, saying the claims that it was cutting its Shanghai plant by up to 20% were “untrue.”
Tesla stock dropped 0.33% to 173.44 Thursday during market trade. On Wednesday, TSLA shares closed at 174.04, down 3.2%. As of market close Wednesday, Tesla stock had shed 10.7% on the week.
The chatter around Tesla production cuts in China coincide with record November sales numbers for the global EV giant.
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Tesla Stock: Demand In China
On Monday, Tesla announced it had sold 100,291 China-made electric vehicles in November. That represents around a 90% increase compared to last year and a 40% gain compared to the 71,704 Tesla EVs sold in October.
Between January 2022-November 2022, Tesla has sold 655,069 China-made vehicles, up 63% year over year.
The outlook for demand in China has become less clear, even with a late October price cut and various other incentives, as the company ramps up its output to record levels. A number of China-made vehicles from the Shanghai factory are also exported.
There were 71,704 Tesla Shanghai EVs sold in October, with 54,504 exported and 17,200 vehicles delivered in China.
Tesla upgraded its Shanghai plant over the summer, aiming to increase production capacity to around 1 million units annually. However, Reuters reported in late September that Tesla planned to keep production at the expanded Shanghai plant at around 93% of capacity through the end of year.
Meanwhile, as concerns regarding consumer demand in China continue, analysts reported bullish views on Tesla coming off last week’s primary deliveries of the long awaited Semi truck. Analysts expect strong interest in the long haul trucking option. They also maintain that, despite Tesla stock setbacks in 2022, the company remains the king of the global EV market.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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