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Key Takeaways
- Tesla shares lost ground in intraday trading Friday following a report the company has reduced production at its facility in Shanghai, China.
- Factory workers in Shanghai were told to scale back production, operating the factory five days instead of the previous schedule of six and a half days a week, Bloomberg reported.
- The move to reduce production comes amid growth concerns as the EV market has cooled and as Tesla faces rising competition.
Tesla (TSLA) shares were over 2% lower in intraday trading Friday following a report that the company has slowed production at its facility in Shanghai, China.
Production at Tesla’s Shanghai facility, where the electric vehicle (EV) maker produces its Model Y and Model 3 vehicles, has been scaled back to operating five days a week from the prior schedule of six and a half days a week, Bloomberg reported.
The EV maker reportedly told workers and suppliers to expect certain production limits to last through April. Tesla did not immediately respond to a request for comment.
The move to reduce production comes amid growth concerns as the EV market has cooled and as Tesla faces rising competition. Analysts at Wells Fargo (WFC) and UBS (UBS) downgraded Tesla’s stock last week, with UBS analysts calling it a “growth company with no growth.”
Analysts at UBS projected the carmaker’s growth could flatline this year before declining in 2025. In the company’s January earnings call, Tesla CEO Elon Musk said that the high interest rate environment of the last few years has also hampered Tesla’s revenue, and suggested the company could see an increase in demand if rates fall this year.
Tesla shares were down about 2.2% at $168.88 as of 12:20 p.m. ET Friday. The company has had a rough start to the year, with its stock price down more than 30% so far in 2024.