Tesla stock slides on reports that the electric-vehicle maker's Shanghai factory may cut back production
- Tesla could trim production by 20% for its Shanghai factory, Bloomberg reported on Monday.
- Shares for the electric vehicle-maker slipped as much as 6% intraday.
Tesla stock fell as much as 6% on Monday as investors assessed reports that may indicate lower production outputs.
The electric-vehicle maker's Shanghai factory could cut Model Y production by 20% from full capacity, Bloomberg reported, citing sources familiar with the matter. The output cuts could take place as soon as this week.
"The decision was made after the automaker evaluated its near-term performance in the domestic market, one of the people said, adding that there's flexibility to increase output if demand increases," per the report.
The factory's full production capacity, according to equity research firm JL Warren Capital LLC, is roughly 85,000 vehicles each month. Tesla China told Reuters in a statement that media reports on Shanghai production cuts were "untrue."
The product report surfaces as demand for EVs in China seem to be waning, but the company denies these claims. A Tesla China spokesperson says the factory shipped an all-time record of 100,291 electric vehicles to customers last month, local media outlets reported.
The news follows a fatal crash involving Tesla's Model Y, which killed two people and injured three others. Additionally, Tesla announced a recall for over 435,000 vehicles throughout China last week, after recalling 80,561 cars the week before.
Tesla (TSLA) stock is one of the biggest laggards in major US equity indexes for the day. The Nasdaq-listed company was trading at $184.65 per share in the afternoon, down roughly 54% year-to-date.
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