Here are the big stories moving EV (electric vehicle) stocks today:
Tesla slows down production in China
Shares of Tesla (TSLA) are reeling again today, down over 7% in midday trade.
As first reported by Reuters, Tesla suspended production at its Shanghai Gigafactory on Saturday, extending a planned shutdown for a day.
Tesla has previously planned to halt production for 8 days at the plant, but told workers on Saturday that it would begin the suspension earlier that originally planned, sources said. The decision to pull the production halt forward came as Tesla was facing Covid-19 infections at Giga Shanghai, as well as its suppliers.
In addition, Tesla is also planning to reduce output at Giga Shanghai in January, Reuters reported earlier today.
Tesla will have production lines operating between Jan. 3 to Jan. 19, and will halt production from Jan. 20 to Jan. 31 for an extended break for Chinese New Year, according Reuters sources.
Tesla typically doesn’t shut down production for an extended period around the Christmas holiday or the Chinese New Year, though other large Chinese companies do shut down during those times. Last year Tesla took only a 3-day break around the Chinese New Year.
Tesla did not give a reason for the reduced production plan in January. However, like other automakers, Tesla has faced demand issues in China, and has to resort to tactics like price cuts and insurance incentives to increase sales. The addition of Covid-related disruptions is a new factor to add for the automaker’s woes in China.
NIO slides on outlook cut
Which brings us to Chinese automaker NIO (NIO), whose Q4 delivery update is weighing on EV automakers as well.
In a statement today, NIO cut its Q4 delivery forecast to a range of 38,500 to 39,500, from its prior outlook of 43,000 to 48,000 units.
The company said it “has been facing challenges in deliveries and productions, together with certain supply chain constraints, caused by the outbreak of the Omicron coronavirus variant in major cities in China.”
NIO also said disruptions in operations led to issues with delivery and registration of new cars for some users.
Despite these operations issues, last week the automaker unveiled its new EC7, a coupe-style SUV, and it’s ES8, a three-row, full-size at its NIO Day 2022 event in Hefei, China. NIO says these vehicles will begin deliveries in May and June of next year, respectively.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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