Tesla Shares Fall 1.8% Premarket as China Woes Grow
Tesla’s stock is in the red as protests in China against the government’s zero-Covid policy intensify. The protests, which began in Urumqi following a deadly fire, expanded over the weekend to several biggest cities in China as residents are growing tired of stringed coronavirus lockdowns and restrictions.
Tesla and Chinese Stocks Down Amid Widespread Protests Against Zero-COVID Policy
Shares of Tesla are down more than 2% in premarket trading Monday as widespread protests picked up pace in China against the rigorous zero-Covid policy, which has been in motion for the entire year. Chinese stocks also fell Monday, with the Hong Kong’s benchmark Hang Seng Index being down over 1.5%.
Apart from Chinese citizens, investors are also growing anxious over China’s strict coronavirus measures, urging them to offload local stocks and the yuan. The situation escalated after protests broke this weekend, shaking investors’ confidence in the Chinese market outlook not long after eased Covid guidelines fueled a massive rally earlier in November.
“I expect markets to remain choppy in the coming months as China repositions itself in managing Covid outbreaks. Reality on the ground is chaotic as officials struggle to implement the 20 new guidelines on Zero Covid while keeping the number of cases from rising.”– Steven Luk, CEO of FountainCap Research & Investment in Hong Kong.
Earlier this year, Tesla was forced to temporarily shut down production at its Shanghai gigafactory amid lockdown restrictions in China’s most populous city. The electric vehicle (EV) giant restarted production in June at roughly 70% of total output.
Protest in China first began in Urumqi after a deadly fire killed 10 people, with some of the residents claiming that the fire could not be put out in time due to pandemic restrictions. The demonstrations spread rapidly and over the weekend to China’s biggest cities including Beijing, Wuhan, and Shanghai, among others.
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Apple Likely to Lose 6M iPhone Pro Units in 2022 Amid Turmoil in China
Earlier today, Bloomberg reported that Apple is expected to face a production loss of around 6 million iPhone Pro devices in 2022 amid turmoil at the company’s key factory in Zhenzhou. However, the final figure could change, depending on how quickly the Taiwanese manufacturer Foxconn, which operates the plant, can get employees back to assembly lines amid protests.
The manufacturing facility in Zhengzhou has faced significant headwinds as the latest surge in coronavirus cases and stringent lockdowns made it very difficult for Foxconn and the local government to tame the outbreak. If the demonstrations continue to escalate, Apple’s production in China could face further setbacks, Bloomberg reported.
Thousands of employees left the facility last month due to food shortages. They were replaced with new workers who also began protesting against pay and quarantine measures. Apple’s shares are almost down almost 2% in premarket trading.
Do you think protests in China will continue to escalate in the coming weeks? Let us know in the comments below.