By Senad Karaahmetovic
Tesla’s (TSLA) assembly plant in Shanghai is expected to see its output drop by more than a third this quarter relative to Q1 as the country’s zero-COVID lockdown restrictions caused worse-than-expected damage to production.
The electric vehicle (EV) maker is hoping to produce over 71,000 units at the Shanghai factory this month, according to an internal production memo seen by Reuters. The total production output in the second quarter would then amount to 115,300 EV units, after the company reported it produced 44,301 units in April and May.
Tesla (NASDAQ:TSLA) produced 178,887 vehicles in the first quarter at its Shanghai factory, according to the China Passenger Car Association (CPCA).
Tesla’s boss Elon Musk said earlier this year that he expected vehicle production at the Shanghai plant to be in line with the first quarter.
"It's also possible we may pull a rabbit out of the hat and be slightly higher," he said at the time.
Several analysts cut their price targets on Tesla stock recently, citing China lockdowns that will likely weigh on revenue and delivery numbers for Q2.
Jefferies analyst Philippe Houchois lowered the price target on Tesla to $1,050.00 (from $1,250.00).
“We cut FY volume 85k units, -5% to 1,415k (52% annual unit growth) mostly on c.30 day production loss, progressive return to work by June end and slow start in Austin. Our estimates factor Q4 Shanghai running at annualized 950k, with modest FY outputs of 50/75k units in Austin/Berlin,” Houchois wrote in a note sent to clients in late May.
Tesla stock is up 1% in pre-open Friday.