On Wednesday, Tesla’s (NASDAQ: TSLA) stock rose by 3.57% when writing this article, even after releasing new Covid data that emerged in China. In addition, the company increased the cost of producing the Model 3 overnight, causing the cost of the electric car to increase by $3,500.
Tesla’s most significant concerns are the new outbreak of covid 19, which could affect its gigafactory in Shanghai, which has expanded to increase production by about 1 million cars a year.
Analysts say slowing Chinese demand could lead to a loss of $2 billion this year and $5 billion in 2023.
Elon Musk, Tesla CEO, noted that his company and his SpaceX project were experiencing “significant recent inflation pressures in raw materials and logistics” due to the recent rise in commodity prices. He linked this to the ongoing conflict between Russia & Ukraine.
Prices for raw materials and labor related to Tesla’s production cycles have risen steadily in the past year. For example, nickel prices, a critical component of EV battery manufacturing, briefly topped a record $100,000 per ton on London Metals Exchange before officials stopped trading last week.
Official trade statistics show that Tesla sold approximately 116,360 Chinese-made vehicles during the first three months. The majority were shipped to Asia and Europe.
China will account for 40% of Tesla’s 2022 deliveries, and it will continue to be a ‘linchpin in the company’s near-term success,” Wedbush analyst Dan Ives stated. As a result, he has a base price target for Tesla shares at $1,400 and a bull goal of $1,800.
Tesla stock rose 0.55 percent in Tuesday trading to trade at $770.5. That brings the stock’s decline of approximately 35.5 percent over its past two months to around 35.5 percent.
Some people say that this high price increase was because of the Chinese market crash. However, others believe that Tesla will continue to rise in the future and will be worth more than ever.