Tesla Crypto Tokens Rise as Shanghai Shutdown Discounted

(Bloomberg) — Tesla Inc. investors are signaling confidence that the automaker can power through disruptions such as the continued shutdown of its Shanghai factory due to Covid-19 lockdowns, at least based on crypto-token trading that suggests its shares will rise Monday.

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The electric-vehicle maker said Saturday it delivered a record 310,048 cars worldwide in the first quarter, about 900 vehicles ahead of the average analyst estimate compiled by Bloomberg. The mark was set despite supply-chain disruptions caused in part by Covid-19 infection rates and a maze of rules worldwide designed to keep the disease from spreading.

Those complications intensified Sunday, with word that Tesla’s factory in Shanghai will stay closed Monday, according to an emailed company memo reviewed by Bloomberg. Tesla asked staff to stay home and abide by community orders in the Chinese city, whose 25 million residents are under phased lockdowns. Production at the plant has been suspended intermittently since mid-March.

For now, investors are betting on Chief Executive Officer Elon Musk’s push to build even more cars, with a new factory just opened in Berlin and another set to open in Austin, Texas, on April 7 — its fourth overall. Tesla crypto tokens on the FTX exchange were trading at $1,141.55 as of 2:45 p.m. Sunday in New York, about 5.3% above Friday’s Nasdaq closing price of $1,084.59.

Musk said on Twitter it had been “an exceptionally difficult quarter” and he praised Tesla workers and suppliers.

Tesla’s deliveries were “better than feared” given the supply chain issues, Wedbush analysts led by Dan Ives wrote in a note. “We believe roughly 20k-25k units were pushed out of 1Q into 2Q due to the logistical and factory issues which makes this underlying demand number still look strong with a robust trajectory for the rest of 2022.”

The U.S. and China are Tesla’s largest markets, and the bulk of sales were of the Model 3 sedan and Y crossover. Tesla makes the 3 and Y models, as well as the older Model S sedan and X crossover, in Fremont, California. Shanghai produces 3 and Y models, while Berlin has just started delivering Ys.

The Model 3 now represents about 1 in every 4 luxury sedans sold in the U.S. and is the fourth-best selling luxury sedan in China, Piper Sandler analyst Alexander Potter said in a note.

That’s “an impressive achievement” given luxury sedans from European automakers like BMW AG, Mercedes-Benz AG and Audi were “once untouchable” in China, Potter said, adding that he rates Tesla as still “firmly overweight.”

(Adds analyst comment in 8th paragraph.)