Tesla warns: we will suffer the consequences of the Coronavirus

The primary risk deriving from Coronavirus it is clearly the one related to health, with the counting that (even in the proximity of what was defined as the possible peak of contagion) is increasing at a dizzying rate in these days, now reaching over 60,000 units worldwide. Tesla however, she is forced to go a step further, starting to take into consideration for the first time also the consequences that the case will have in terms of business.

Tesla weighs Coronavirus risk

If the peak of the epidemic had already been reached and the situation could be defined as "under control", financial alarms would probably have stopped: the stock market has in fact continued to grow almost all over the world (at least without any further shock after the first settlement on the eastern markets) and the same Tesla initially limited itself to providing around ten days of plant shutdown following the Chinese government diktat. Not only that: this setback was seen as irrelevant to annual plans, with limited consequences in terms of productivity and distribution times. But now the situation starts to change partially.

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Within the document with which Tesla has a duty to warn its investors about the possible risks that the company faces, in fact it reads for the first time how the epidemic that broke out at the end of 2019 may have unforeseen consequences and which may continue over time . The risk, in fact, is no longer linked only to the days of plant closure, but also to the difficulty of finding components on the market: China, at the base of most of the industry at an international level, could in fact stop for a long time and this it would lead to delays and increased costs, something that could prove to be a shock to the automotive industry (and Tesla, for many reasons and due to a latent fragility) could suffer the greatest repercussions.

Coronavirus risk for Tesla

The smartphone market it could collapse 30% this year in China and this factor will weigh on the entire sector internationally. The situation is not too dissimilar on the automotive market, where Chinese demand will slow down heavily throughout the year and production will suffer repercussions at all latitudes.

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Although it is clear that Coronavirus is a risk factor to be heavily considered, we still don't know how much this can actually weigh and when these consequences will be reflected concretely on the stock markets. To date, the backlash seems less than what the news suggests, but if the epidemic were to spread outside the Asian continent then everything could come to light quickly. At the moment Coronavirus is a simple risk factor as is the seismic risk for the Fremont site, but in this case the event is in full swing.

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