Tesla (NASDAQ:TSLA) is making headlines on Thursday morning, but that’s mostly pertaining to its CEO Elon Musk. Musk has made a public offer to acquire Twitter (NYSE:TWTR) for $54.20 a share. That news has TSLA stock down nearly 4% on the day. That’s as investors weigh the potential implications of what that may mean for Musk’s large stake in the EV producer.
However, the Twitter news is overshadowing more company-specific events, such as the shutdown at the Shanghai Gigafactory.
Tesla’s Shanghai factory is the company’s most productive plant and has had to halt operations since the end of March due to Covid-19 lockdowns in place. The worst part? There is no concrete date for a reopening. With Tesla projecting deliveries of 1.4 million vehicles in 2022, the current factory shutdown is not good news. The Shanghai factory can produce 3,400 vehicles a day. However, each day of lost production will cost Tesla roughly 2,000 deliveries, according to Wedbush analyst Dan Ives.
However, there’s some good news for Tesla. The company just announced the opening of its fourth global manufacturing plant, this one based in Austin, Texas. This news comes after it recently opened its factory near Berlin, Germany. The German factory projects only a fraction of what the Shanghai factory can produce — about 30,000 vehicles through the first half of 2022. While these new factories will undoubtedly help Tesla increase production, shuttering the Shanghai factory is certainly concerning for the company.
At the Cyber Rodeo — the opening of the Gigafactory in Austin, Texas — Tesla announced a new lower priced Model Y with a larger battery. The new 4680 battery cells are twice the size of batteries currently being used in the Model Y Long Range. The new Model Y will be priced at $59,990. While it’s currently only available to Tesla employees, it should eventually be available for the general public.
As it pertains to TSLA stock, the company’s production numbers, Shanghai situation and new models should have more of an impact than the Twitter-Musk news. While the latter may be driving the short-term narrative, these are the long-term drivers of the stock.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.