Tesla, Inc. (NASDAQ: TSLA) has halted production at its factory in the Chinese city of Shanghai for two days as the country tightened restrictions to curb the latest outbreak of COVID-19, a report published by Reuters said citing the company’s notice to suppliers.
The electric vehicle manufacturer suspended production at Gigafactory 3 on March 17 and 18. The 24/7 plant manufactures the Model Y crossover SUV and the Model 3 sedan.
It is not yet known whether other operations at the plant would also be suspended over these two days. According to the China Passenger Car Association, last month, Gigafactory 3 delivered 56,515 vehicles, of which 33,315 were exported.
TSLA stock closed 4.8% higher on Wednesday. However, it lost 0.2% during after-hours trading to end the day at $839.
How Will This News Impact Tesla’s Stock Price?
We do not expect this news to impact the Texas-based company’s stock price as production has been halted only for two days. The factory exported almost 60% of the vehicles it manufactured last month; if the Chinese government introduces further restrictions, then it might disrupt the supply chain and Tesla’s shares.
Analyst Opinions
Last week, Piper Sandler (NYSE: PIPR) analyst Alexander Potter maintained a Buy rating on the stock with a $1,350 price target (60.7% upside potential). The analyst views the company’s exposure to China as a “major positive.”
“Nickel prices are garnering particular attention given their importance in battery manufacturing, but deteriorating U.S.-China relations are potentially more consequential in the long-term,” he said.
Commenting on the Russia-Ukraine crisis, Potter said that if American companies “are eventually used as pawns in a wider geopolitical conflict, then Tesla shareholders would likely suffer.”
Overall, the stock has a Moderate Buy consensus rating based on 15 Buys, seven Holds and six Sells. The average TSLA price target of $1,068.40 implies 27.2% upside potential. Shares have lost nearly 30% year-to-date.
Website Traffic
TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Tesla’s performance.
According to the tool, compared to the previous year, Tesla’s website traffic registered a 17.8% fall in global visits in February. Moreover, website traffic has declined 37.6% year-to-date against the same period last year.
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