Analyst Sees Tesla Taking 8% Volume Hit In Q2 From China COVID-19 Lockdowns

Tesla Inc’s TSLA production volume could take a hit of 8% in the second quarter due to a production halt of about a month at Giga Shanghai, Gene Munster, founder-analyst at Loup Ventures, told CNBC.

What Happened: Tesla’s Giga Shanghai factory has been shut since the start of this month amid citywide COVID-19 lockdowns in China.

“..to simply put the numbers around this is that they're probably going to miss 30 days of production from Shanghai. That is about 40,000 vehicles if you put that in the context of the quarter, that's about eight percent of the June quarter,” Munster said in an interview with CNBC.

“If you look in the full year context, assuming that the production works itself out, you're looking at a 2% headwind and so it is something that needs to be factored in…that investors are going to be okay with this Shanghai shutdown as long as there is demand.”

See Also: Tesla Giga Shanghai Said To Remain Shut Amid COVID-19 Lockdowns

Why It Matters: Tesla is not alone. Shanghai-based Nio Inc NIO on Saturday reportedly suspended production amid China’s recent curbs to contain the spread of Covid-19 cases. The EV maker said the company’s supplier partners in Jilin, Shanghai, and Jiangsu suspended production one after the other.

Giga Shanghai contributed 52% of Tesla’s global deliveries last year. The factory has been making the Model 3 electric sedan and the Model Y sport-utility vehicles at the Shanghai gigafactory.

German automaker Volkswagen Group VWAGY halted production last week as well.

Price Action: Tesla shares closed 3% lower at $1,025 a share on Friday.

Photo courtesy: Tesla