Tesla stock down on Red Sea delays, rising labor costs, and price cuts<\/b><\/p>\n
KEY POINTS<\/span><\/p>\n <\/p>\n .Shares of Tesla dipped Friday morning as the stock faced pressure from supply chain delays due to a crisis in the Red Sea, and after offering more price cuts on its vehicles in China.<\/span><\/p>\n <\/p>\n .In the U.S., rising labor costs and a decision by rental car company Hertz to sell off a large portion of its electric vehicle fleet also added to Tesla\u2019s woes.<\/span><\/p>\n <\/p>\n .Late Thursday, Reuters and others reported that Tesla plans to suspend most production at its factory in Germany from around Jan. 29 to Feb. 11 due to conflict in the Red Sea.<\/span><\/p>\n <\/p>\n Shares of Tesla<\/span><\/p>\n \u00a0closed down more than 3% Friday as the stock faced pressure from supply chain delays due to a crisis in the Red Sea, and after offering more price cuts on its vehicles in China. In the U.S., rising labor costs and a decision by rental car company Hertz to sell off a large portion of its electric vehicle fleet also added to Tesla\u2019s woes.<\/span><\/p>\n <\/p>\n Reuters reported late Thursday that Tesla plans to suspend most production at its factory outside Berlin in Grunheide, Germany, from around Jan. 29 to Feb. 11 due to conflict in the Red Sea that has disrupted global trade.<\/span><\/p>\n The Iranian-backed Houthi militia group has been attacking cargo ships and merchant vessels in the Red Sea in response to the ongoing war in the Gaza Strip. These attacks have drawn condemnation from leaders around the globe.<\/span><\/p>\n <\/p>\n \u201cThe considerably longer transportation times are creating a gap in supply chains,\u201d Tesla told Reuters in a statement.<\/span><\/p>\n <\/p>\n Analysts at Baird estimate Tesla produces between 5,000 vehicles and 7,000 vehicles per week at its German vehicle assembly plant, which would imply \u201ca 10k-14K hit\u201d to deliveries in its first quarter, according to a Thursday note.<\/span><\/p>\n <\/p>\n The Baird analysts wrote that they are \u201cwary\u201d of further effects to Tesla\u2019s supply chain, and they are \u201cclosely monitoring\u201d any effect on the company\u2019s shipping routes from China. \u201cNo delays have been cited, however, we speculate that disruptions in the Red Sea may lead to longer wait times as supply chains are rerouted,\u201d they wrote.<\/span><\/p>\n <\/p>\n Analysts were also focused on Tesla\u2019s continuing price cuts including new discounts in China. Morgan Stanley analysts noted Model 3 and Model Y vehicles have been freshly discounted, though the cuts were \u201cmore moderate than the market had expected,\u201d according to a note Friday.<\/span><\/p>\n <\/p>\n Price cuts over the past year have affected Tesla\u2019s ability to keep selling its fully electric vehicles in high volumes to rental car companies including Sixt and Hertz<\/span><\/p>\n .<\/span><\/p>\n <\/p>\n Hertz CEO Stephen Scherr said on CNBC\u2019s \u201cSquawk on the Street\u201d on Thursday that his company is taking 20,000 EVs out of its fleet, which was comprised mostly of Tesla vehicles.<\/span><\/p>\n <\/p>\n Hertz is trying to \u201cbring supply in line with demand\u201d Scherr said, and \u201caddressing a cost issue related to the EVs in the context of damage and damage costs\u201d as well as depreciation in the value of the EVs.<\/span><\/p>\n <\/p>\n Meanwhile, Tesla\u2019s business and reputation remains under pressure in Europe due to ongoing labor strikes in Sweden and throughout Scandinavia.<\/span><\/p>\n <\/p>\n At its factories in the U.S., the EV maker is implementing pay rate increases for workers that kick in this month, a move seen as a tactic to stave off workers\u2019 wishes to unionize. The pay bumps follow historic wins by the United Auto Workers in 2023 with Tesla competitors in Detroit, and an announcement by UAW that it would aim to organize beyond the Big Three including at Tesla, Toyota and others.<\/span><\/p>\n <\/p>\n PROFILE<\/b><\/p>\n Tesla, Inc<\/b>. designs, develops, manufactures, sells and leases fully electric vehicles and energy generation and storage systems, and offer services related to its products. The Company’s automotive segment includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits. Additionally, the automotive segment is also comprised of services and other, which includes non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by its acquired subsidiaries to third party customers, and vehicle insurance. Its energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its automotive products include Model 3, Model Y, Model S and Model X. Powerwall and Megapack are its lithium-ion battery energy storage products.<\/span><\/p>\n <\/p>\n Robyn Denholm<\/span><\/p>\n Independent Chairman of the Board<\/b><\/p>\n <\/p>\n Elon Musk<\/span><\/p>\n Chief Executive Officer, Director, Technoking of Tesla<\/b><\/p>\n <\/p>\n Vaibhav Taneja<\/span><\/p>\n Chief Financial Officer<\/b><\/p>\n <\/p>\n Address<\/b><\/p>\n 1 Tesla Road<\/span><\/p>\n Austin, TX<\/span><\/p>\n 78725<\/span><\/p>\n United States<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Tesla stock down on Red Sea delays, rising labor costs, and price cuts KEY POINTS .Shares of Tesla dipped Friday morning as the stock faced pressure from supply chain delays due to a crisis in the Red Sea, and after offering more price cuts on its vehicles in China. .In the U.S., rising …<\/p>\n","protected":false},"author":1,"featured_media":1746,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,8],"tags":[],"class_list":["post-1745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-technology"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts\/1745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/comments?post=1745"}],"version-history":[{"count":0,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/posts\/1745\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/media?parent=1745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/categories?post=1745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/aqqute.com\/blog\/wp-json\/wp\/v2\/tags?post=1745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}