Analysts say when the localization of the Shanghai gigactory improves to a certain high level, it may effectively ease the llout of coronavirus outbreak on Tesla in the overseas market.
On April 29, Tesla CEO Musk tweeted to protest against the lockdown measures. The company scheduled some workers to return to work early on April 29, but then cancelled it.
Affected by the news, the index for Tesla concept stocks (BK0644) closed 0.27 percent lower on the day. 55 of the constituent stocks fell, among which Beijing WKW Automotive Parts Co Ltd (002662.SZ) dipped to limit-down of 10 percent and BYD (002594.SZ) closed 3.36 percent lower.
Its noticed that the Chinese market has become an increasingly important growth driver for Tesla. According to its Q1 earnings report, Tesla delivered 88,400 cars globally in the first quarter, to which the Chinese market contributed 16,700 units.
In addition to the U.S., Mexicos auto industry is also experiencing a shutdown. Of note, car parts of many Chinese and American automakers are manuctured in Mexico, including Tesla. Although what caused the production suspension of Teslas Shanghai ctory remained unclear, the spread of the epidemic has clearly affected the global auto industry.
The report also says currently, only part of working procedures continues but the assembly line hasnt started. Its expected that there will be no car rolling out of the production line until May 9.
May 7 (NBD) — Tesla Shanghai ctory did not restart production as scheduled on Wednesday, the first day back from the May Day holiday, for possible supply shortage in the overseas market, reported media agencies on Thursday citing multiple Tesla workers and industry insiders.
File photo/Zhang Xiaoqing (NBD)
However, it remains unclear whether it is caused by a supply issue, said a person close to Tesla when reached by National Business Daily (NBD). But as of press time, the person-in-charge of Tesla Shanghai ctory cannot be reached for an immediate response.
NBD noticed only 30 percent of Teslas car parts are provided by local suppliers in China, which means there are still a lot more depending on imports. Plagued by the global outbreak of coronavirus, a string of automakers are heavily battered by plant shutdowns and Tesla is no exception. Currently, both of Teslas Fremont and Nevada plant remain closed.
Besides, the gross profit margin of Teslas auto business and its overall business reached 25.5 percent and 20.6 percent, both setting an 18-month high. And Tesla contributed the performance to the improved profitability of its Shanghai ctory.