What happened
As is often the case, there was no shortage of news and coverage on electric vehicle leader Tesla (TSLA 12.06%) Thursday. That news had Tesla stock moving higher by as much as 1.4% early in the session, but the trend subsequently reversed, sending it down by nearly 3% relative to where it closed Wednesday. As of 11:46 a.m. ET, it was virtually flat.
Image source: Tesla.
So what
That initial jump could have stemmed from investors digging more deeply into a Reuters article published Wednesday that reported that Tesla will be suspending production at its Shanghai factory for two weeks at the beginning of July. The headline may have had investors turning negative about Tesla's near-term outlook, but the maintenance work scheduled for the plant is expected to increase its productivity. That should result in record production levels to come by the end of July, according to the report.
Another bit of news that drew a negative response from investors was the release of a May 30 interview with CEO Elon Musk in which he said Tesla's new factories in Berlin and Texas were both burning through cash and losing billions due to supply chain-related delays. Musk colorfully called the plants "gigantic money furnaces."
Musk said supply chain disruptions have been interfering with the company's ability to ramp production up at the two new facilities. According to CNBC, he summarized the situation by saying, "there's a ton of expense and hardly any output." He added that getting those new plants and the Shanghai factory running smoothly is "overwhelmingly" his top priority.
Now what
But while that interview was just released Wednesday, the comments were made several weeks ago. In the interim, the automaker has announced cost-savings measures and a plan to reduce salaried employee headcount, and Musk said that he expected to resolve the company's current challenges. Tesla hasn't changed its guidance target for producing 1.5 million vehicles this year, and investors looking past the headlines probably helped the stock bounce back from its initial drop on Thursday.
