Shares of Tesla (TSLA) fell 8.06% today, February 25, to close at $682.22 a share. Tesla traded at $883.09 a share just a month ago on January 26.
Part of that drop, of course, is due to the sell off in the general market, especially for high multiple, high momentum stocks, on the fears set off by rising bond yields.
But hard as it is, it’s important to try to push through the general market clutter and listen to good and bad news stories from individual stocks.
Today, February 25, Bloomberg and Reuters reported that Tesla had told its workers that the company would halt some production at its car-assembly plant in California for about two weeks. Staff on a Model 3 production line in Fremont were told their line would be down from February 22 until March 7. Tesla is battling supply-chain issues resulting from backlogs at ports, severe snow storms affecting ground transport, and shortages in some semiconductors used in the its cars.
Even though Tesla has opened new plants in China, the Fremont plant is still the most important part of Tesla’s production base with the capacity to make an estimated 600,000 vehicles a year.
It’s not clear how big an impact any Fremont shutdown would have on Tesla’s ability to meet demand. The company finished 2020 with excess inventory and has never sold out its production capacity.
