Why Investors Slammed the Brakes on Tesla Stock Today

For obvious reasons, auto companies depend heavily on production for their success. So it was entirely understandable that investors would react negatively to a suspected case of arson near the site of one of Tesla‘s (TSLA -3.93%) sprawling “gigafactories.”

Following news of the incident, which looks as if it will shut the facility for at least several days, market players largely traded out of Tesla stock. It closed Tuesday almost 4% lower, a steeper decline than the 1% the S&P 500 index endured.

A fire near a gigafactory cut power

A fire broke consumed an electricity pylon close to Tesla’s factory near Berlin, Germany. While the blaze didn’t spread to the facility or cause injuries there, it did deprive the site of power, thus necessitating a work stoppage. According to reporting by Reuters on the incident, citing the electric-vehicle (EV) company, the damage caused will halt production until early next week at the least.

Emergency services in the area extinguished the fire, which also affected tens of thousands of electricity consumers in the area.

The news agency added that the shutdown will cost Tesla “in the high hundred of millions of euros.” On Tuesday alone, 1,000 vehicles in the factory were in an unfinished state.

German authorities are treating the incident as an arson attack. Reuters quoted the economy minister of Brandenburg state, the region where the facility is located, as saying the incident bore “terrorist markings.” A letter allegedly written by an eco-activist organization known as the Volcano Group claimed responsibility for the incident. The letter is being investigated.

Elon Musk weighed in

On X, the social media site previously known as Twitter, Tesla CEO Elon Musk wrote of the apparent perpetrators, “These are either the dumbest eco-terrorists on Earth or they’re puppets of those who don’t have good environmental goals.”

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Source link

About The Author

Scroll to Top