Tesla shares were down 5.85% at $116 in premarket trading on Tuesday after the company announced that it intends to run a reduced production schedule during January 2023. The company will run production from January 3 to January 19 before halting output for the remainder of the month for an extended break for the Chinese New Year. This sees the electric vehicle maker extend its reduced output as experienced in December.
Because the decision to halt production at the end of January has not been an existing practice, investors are unsure of the reason behind the company’s decision. Furthermore, this decision comes after the company already suspended production at its Shanghai plant for the final week of December.
Since October, the company’s stock has plunged by 56%, with investors expressing concern over Chief Executive Officer Elon Musk’s increased involvement in Twitter and resultant Tesla share sales. Furthermore, investors remain unsure of demand, particularly in China.
Electric vehicle manufacturers at large have been affected by a demand slump in China. Furthermore, many including Tesla have implemented temporary production suspensions in response to the government’s zero-COVID policy.