Tesla Puts Its 8% Stock Drop Down To Shipping

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Although Tesla (TSLA.O) is expanding once more, the sector can find a little solace.

Expectations fell short

In the third quarter, the $760 billion electric vehicle manufacturer manufactured over 366,000 automobiles, a 41% gain from the prior three months and reversing the first-half decline. However, the number of automobiles it delivered to consumers fell 5% short of expectations, which the business blamed on shipping issues. On Monday, shares of Tesla dropped 8%.

Pricing increase

Even though the supply chain as a whole has improved since the pandemic began, freighters that transport automobiles have seen a significant pricing increase. The pricing pressures elsewhere are diminishing, according to a number of shipping rate indicators, including the Baltic Dry Index (.BADI) and Drewry’s World Container Index, both of which are down 20% this year. The Global Supply Chain Pressure Index (XWGSCP=ECI) of the Federal Reserve Bank of New York has been falling for four consecutive months and has reached its lowest level since January 2021.

Difficulties despite improvement 

All things considered, the adjustments suggest that the auto industry continues to face difficulties despite indications of improved availability of microchips and declining costs in other industries. One company, Ford Motor (F.N), issued a third-quarter earnings warning. Tesla and its competitors are stumbling as a result of the escalating challenges. 

 

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Source: Reuters

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