You’re here (TSLA) delivered roughly a handful of Model Ys at its Texas factory launch Thursday night. Meanwhile, the EV maker continues to deal with a factory shutdown in Shanghai due to a surge in Covid cases. State regulators in China also said Tesla would need to provide a safety-related software update to fix a semiconductor component on more than 127,000 Model 3s. Tesla stock pink slightly Thursday.
Tesla’s event in Austin, called Cyber Rodeo, marked the opening of its $1.1 billion factory in Texas.
Giga Austin Model Ys will be the first to feature Tesla’s new structural battery pack and 4680 battery cells. It’s unclear if all Model Ys produced in Austin will include the new battery packs, which are a larger, cylindrical cell that Tesla says produces six times the power and five times the energy capacity while reducing cost.
CEO Elon Musk spoke for less than 30 minutes at Thursday’s event, before several Model Ys were driven across the stage. Tesla’s Cybertruck made an appearance afterwards, with Musk pointing out a new feature: It has no handles, since it apparently automatically knows when the driver is nearby. Musk said Tesla plans to begin production of the CyberTruck next year.
“This year is all about scaling up, and next year there is going to be a massive wave of new products,” he said. Musk also touted the Roadster and Semi for next year.
The Texas factory, together with the new Berlin factory, is expected to double Tesla’s annual production capacity to 2 million vehicles once volume production is achieved.
That won’t be an easy task, as chip shortages and other supply-chain constraints continue to hamper the auto industry overall.
Shanghai Factory Closure Extended
Rising Covid cases are also wreaking havoc at Tesla’s Shanghai factory, which has been shut down since last week due to strict government rules. It is now estimated it won’t reopen until at least Friday. The company twice tried to restart production this week, but was unable to do so. Chinese authorities appear to have extended the lockdown indefinitely.
Tesla Shanghai will have been shut down for 12 days by Friday, the longest stoppage since it started production there in 2019. The company produces about 2,000 vehicles a day in Shanghai.
Meanwhile, Chinese regulators said Tesla would be providing an over-the-air update to fix a software glitch on 127,785 Model 3s. The issue affects made-in-China and imported vehicles between January 2019 and January 2022.
“The problem lies in the semiconductor component, which … may lead to potential collisions and pose a safety hazard in some extreme scenarios,” the State Administration for Market Regulation (SAMR) said in a statement, according to a local report.
Shares rose 1.1% to 1,057.26 on the stock market today. Tesla stock has a cup-base buy point of 1,208.10, according to MarketSmith chart analysis. Shares have taken a breather in recent days amid a market sell-off, after racing up 32% since mid-March.
Tesla’s relative strength line also spiked up over the last few weeks, although it has ticked downward in recent days. Its RS Rating is 95 out of a best-possible 99, while its EPS Rating is 75. With a Composite Rating of 98, Tesla is the top-ranked stock in IBD’s Auto Manufacturer’s industry group.
It has an A- Accumulation/Distribution Rating, which means institutional investors are heavily buying Tesla stock.
Among Tesla’s China-based rivals, Nio (NIO) dropped 6.1%, Li-Auto (LI) fell 4.1% and Xpeng (XPEV) lost 2.8%. Warren Buffett-backed BYD (BYDDF) was up 0.1%.
In the US, EV maker Lucid (LCID) fell 2.9% and Rivian (RIVN) declined 0.3%. And for legacy automakers with growing EV sales, General Motors (GM) fell 2% while Ford (F) was down 2.8%.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Right Now?
Is Rivian Stock A Buy Right Now?
Why This IBD Tool Simplifies The Search For Top Stocks
Here Are The EVs Set To Challenge Tesla In China
Market Holds Key Support, For Now; Tesla ‘Cyber Rodeo’ On Tap