Skip to main content

Tesla (TSLA) stock crashes on anticipated lower production and a ‘real’ recall

Tesla’s (TSLA) stock crashed more than 8% on Elon Musk disclosing that he anticipates lower production this quarter and another recall that is a “real” one this time.

Yesterday, Tesla released its Q2 2023 financial results, and it beat Wall Street expectations on both revenue and earnings.

Despite the beat, Tesla’s stock was down by over 8% this morning.

The drop is attributed to CEO Elon Musk announcing after the release of the results that he expects production to be “slightly” down this quarter compared to the last.

The CEO said that it is due to “global factory upgrades”:

We continue to target 1.8 million vehicle deliveries this year, although we expect that Q3 production will be a little bit down because we’ve got some shutdowns to for — a lot of factory upgrades. So, just probably a slight decrease in production in Q3 for sort of global factory upgrades.

He didn’t elaborate on what those upgrades entail.

It is believed that Model 3 production lines are likely to temporarily shut down soon in order to upgrade to an anticipated new version of the electric sedan.

Model 3 is currently only being built at Tesla’s Fremon factory and Gigafactory Shanghai. It’s not clear if that’s what he means by “global factory upgrades” or if factory shutdowns are also anticipated at Gigafactory Berlin and Texas.

Top comment by Hydrogen Last

Liked by 17 people

The seatbelt recall while substantial won't cost a lot to fix. I doubt that's what hit the stock so hard.

Buy on the rumor, sell on the news is typical for Tesla earnings calls. 8% is more than normal, no doubt the production interruption behind that. Many will be assuming its due to weak demand rather than positioning for significant growth. We'll see.

View all comments

On top of the lower production in Q3 likely affecting the stock negatively today, it was also confirmed that Tesla is recalling 15,869 2021-2023 Model S and Model X vehicles. Some media are linking the recall to the stock price drop.

Unlike many recently reported Tesla recalls, this one is sort of a “real” one because it can’t be fixed with an over-the-air software update.

Tesla says that some seat belts may have been improperly attached:

Tesla, Inc. (Tesla) is recalling certain 2021-2023 Model S and Model X vehicles. The front-row seat belts may not be connected properly to the pretensioner anchors, which can cause the seat belts to detach.

While some media are linking this to the price drop, it is a relatively inexpensive issue to fix and isn’t likely to be financially material to the company.

FTC: We use income earning auto affiliate links. More.

Stay up to date with the latest content by subscribing to Electrek on Google News. You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.

Comments

Author

Avatar for Fred Lambert Fred Lambert

Fred is the Editor in Chief and Main Writer at Electrek.

You can send tips on Twitter (DMs open) or via email: fred@9to5mac.com

Through Zalkon.com, you can check out Fred’s portfolio and get monthly green stock investment ideas.


Manage push notifications

notification icon
We would like to show you notifications for the latest news and updates.
notification icon
You are subscribed to notifications
notification icon
We would like to show you notifications for the latest news and updates.
notification icon
You are subscribed to notifications