Because the Tesla stock stopped on Tuesday

Investors may be frightened by the prospect of a "production loss".

What happened

The shares of electric car maker Tesla (Tesla shares - ticker TSLA) suffered a setback on Tuesday after Barron's commented that analysts' estimates for the company's second-quarter production levels "look a bit high." At 10:10, Tesla stock fell 2,5%.

And so?

If you remember, it's been a week since Tesla announced plans to resume full-scale production of electric vehicles (EVs) at its Shanghai gigafactory in China - 2.600 cars a day, 949.000 cars a year, and a large pushed towards the company's goal of building 1,5 million EVs this year. A week later, however, Bloomberg reports that the company is still at 70% of production capacity, or about 1.800 cars a day. 

However, it is important to consider the loss of approximately 100.000 production cars as early as Q300.000 and Q260.000 due to COVID restrictions in China, which hindered production, and slower-than-expected production ramps in Tesla's gigactories in Texas and in. Germany. Taking these factors into account, Barron's calculates that Tesla could only produce 1,5 - or even XNUMX - electric vehicles this quarter. This suggests Tesla will fail to hit its XNUMX million unit target this year.

What will happen now?

This explains why some investors may be inclined to sell Tesla today, before it has a chance to confirm the "non-production". I think this is an overreaction and probably a mistake.

Consider this: Tesla probably won't produce 1,5 million cars this year (but it still could - with Elon Musk you never know). But you certainly can't blame Tesla for missing a target if he just missed it because of COVID restrictions imposed by a sovereign government. Even if Tesla fails to produce 1,5 million cars this year, the fact that he is already returning to full capacity in China means he could produce 1,5 million electric vehicles (or more) next year.

In short, investors should not focus on the one-year sales target due to the quirks of a single country's health regulations, but rather on the trend of rising and accelerating production levels of Tesla factories under construction throughout. the world.

In the long term, the growth trend of this stock is still growing. Don't be too scared for a down day.