Why Tesla stock popped on Monday

Hope springs eternal for a spring gigafactory reopening in China.

| More on:
blue tesla

Image source: Tesla

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric cars leader Tesla (NASDAQ: TSLA) stock jumped 2.2% in 11:05 a.m. ET trading Monday, the first day after a long holiday weekend. Most of the Tesla news these past several days has concerned boardroom maneuverings as Elon Musk angles for control over social media company Twitter (NYSE: TWTR).

But that's not what's pushing Tesla stock higher today. 

So what

Instead, what's giving Tesla investors hope today is a story that ran in The Wall Street Journal over the weekend, predicting that Tesla might be able to resume -- at least partially -- production of cars at its Chinese gigafactory this week.  

Tesla is expected to begin running one single "shift" per week and then increase that to two shifts by the end of April, reports the paper. Assuming that shifts at the Shanghai plant are run as the company runs them in the U.S. (four shifts per week, 12 hours per shift, operating three days on, three days off), that should bring Tesla back to 50% capacity in China by the end of this month.  

Now what

There's been no confirmation yet that Tesla has actually succeeded in getting its factory restarted in Shanghai as of this writing. Reuters confirmed that the company is "preparing" to reopen, noting also that Tesla's workers will need to live on site at the factory in order to work there while the city remains under lockdown. And Beijing is said to have approved Tesla for "priority" in reopening -- but that falls short of an official confirmation that reopening has happened.  

Tesla is relying on Shanghai to do much of the heavy lifting toward its goal of producing more than 1 million cars annually worldwide this year, and the longer the Shanghai factory remains shuttered, the harder it will be for Tesla to hit that goal. Eventually, however, Tesla aims to expand Giga-Shanghai to the point where this single factory is able to produce 1 million cars annually on its own.  

So long as you agree that the Shanghai gigafactory will reopen eventually, it's probably best to think of this current delay in reopening as just one more bump in the road in a years-long growth story for Tesla. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Tesla and Twitter. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 

More on International Stock News

Woman in celebratory fist move looking at phone
International Stock News

This stock is beating amazon at its own game

The "Amazon of South Korea" might be better than the Amazon of the rest of the world.

Read more »

A woman pulls devil rock'n'roll hands and sticks her tongue out whilst headbanging, she's rocking it.
International Stock News

Why Ethereum and Solana were trading wildly today

Today, we learned more about Celsius Network's balance sheet problems.

Read more »

a close up of a hand is outstretched amid graphic images of currency and cyprtocurrency symbols seemingly floating around a sphere of light representing perhaps the globe.
International Stock News

Big buying activity boosting Bitcoin, Cardano, and Polkadot today

These mega-cap cryptos are seeing the benefits of an incredible market-driven sentiment shift.

Read more »

Blue electric vehicle on a green rising arrow with a charger hanging out.
International Stock News

Why Tesla stock was up again today

Tesla just hit the 3-million-vehicle milestone, but there is plenty more to come.

Read more »

Man and woman looking over documents at computer
International Stock News

Warren Buffett says this type of investor benefits most when stock prices fall

Thinking like a buyer can make market downturns easier to manage.

Read more »

asx share price rebound represented by wooden blocks spelling rebound with coins on top
International Stock News

Just how safe is the stock market right now?

Stocks are rebounding, but should you really invest right now?

Read more »

market sell off
International Stock News

Stock market sell-off: How I’m continuing to make passive income

I love my dividend stocks, and since I'm still not retired, market downturns let me buy more of what I…

Read more »

Iron ore bear market Fortescue dissapointed man and shadow bear with a tumbling down stock market
International Stock News

Your investments vs. a bear market: How to come out on top

Bear markets can provide a great opportunity for you to emerge in a better space after they end.

Read more »