By Oyintari Ben
Stocks of Apple and Tesla have fallen as worries about delays in their Chinese production lines rise.
Many investors are encouraged by China’s announcement that it will ease its rigorous quarantine regulations for arrivals starting on January 8. They anticipate this will simplify supply chain movement in 2023.
However, global investors are also being wary in light of more interest rate increases, a recession in the global economy, and the ongoing conflict in Ukraine.
Analysts predict that it will take time for production to resume its upswing given the surge of Covid cases in important manufacturing centres.
Foxconn, an Apple supplier, experienced production delays earlier this year as a result of unrest at its “iPhone City” plant in Zhangzhou. Compared to the same month in 2021, the corporation reported an 11% decline in revenue for November.
According to media reports this week, production at Tesla’s Shanghai factory was reduced as Covid infections increased in China. The company declined to comment.
However, analysts claim that the company’s poor sales are demonstrated by the discounts it has provided to both Chinese and North American customers.
Investors are also concerned about Tesla’s CEO Elon Musk, who frequently makes news for the wrong reasons. After a protracted legal battle, he acquired control of Twitter in October, and since then, Musk has devoted a sizable portion of his time to managing the social media network. Others have suggested that his purported diversion during this period is another factor contributing to Tesla’s stock price decline.
Last week, Musk tweeted asking users if they thought he should stay as the platform’s CEO. After receiving a negative response, he announced he would step down as soon as a replacement was chosen.
Analysts claim that he must now win back the trust of shareholders and board members.
In his newsletter, Webush tech analyst Dan Ives stated that Musk “is perceived as ‘asleep at the wheel’ from a leadership viewpoint for Tesla at a time when investors need a CEO to manage this Category 5 storm.”
Instead, Musk is totally preoccupied with Twitter, which has been a never-ending headache for investors.
