Apple and Tesla stocks plummet over supply chain issues in China
American tech giant Apple and automotive company Tesla stocks have reportedly slumped due to increasing concerns regarding production delays in China. Apple's stock fell to its lowest level since June 2021. Following a similar path, since reaching a record high in November 2021, Tesla's shares have plummeted by 73%. As per reports, Covid regulations and months of lockdowns have made it difficult for corporations to retain production in China. China is currently experiencing a staffing shortage as the country fights a Covid surge after relaxing COVID-19 restrictions. The announcement by China that it will relax its tight travel quarantine regulations from January 8 is positive news for many investors who anticipate easier supply chain movement in 2023. However, investors are scared as there are more interest rate increases, global recession, and ongoing conflict in Ukraine. Analysts expect that it will take time for production to regain its momentum given the increasing Covid cases in important production centers. Foxconn also experienced delays in production earlier this year as a result of instability at its ‘iPhone City’ facility, Zhangzhou. According to the company, November's sales were down 11%, when compared to the same timeframe in 2021. As per sources, output at Tesla's Shanghai factory was also reduced as Covid infections increased in China. However, analysts claim that the company's low sales are demonstrated by the discounts it has provided to both Chinese and North American consumers. Investors are also concerned about Tesla CEO Elon Musk, who often makes headlines for the wrong reasons. After a long legal battle, he acquired Twitter in October, and ever since, Musk has dedicated a substantial portion of his time to overseeing the social media network. Some have pointed to his supposed distraction throughout this time as another factor for Tesla's share price decline. Source credit: https://www.bbc.com/news/business-64099654