Why Investors Slammed the Brakes on Tesla Stock Today

06.03.2024

For obvious reasons, the success of automobile companies depends heavily on manufacturing. Therefore, it is understandable that investors reacted negatively to a suspected arson attack near one of Tesla’s (NASDAQ: TSLA) gigafactories.

After news of the incident, which looks like it will shut down the plant for at least a few days, market participants mostly traded Tesla shares. On Tuesday, they closed nearly 4% lower, which is 1% more than the S&P 500 index.

A fire engulfed a power transmission tower next to a Tesla plant near Berlin, Germany. While the fire did not spread to the plant and did not cause injuries, it did deprive the plant of power, leading to a shutdown. According to Reuters, citing the electric vehicle (EV) company, the damage caused will halt production until at least early next week.

Emergency services that arrived on the scene put out the fire, which also affected tens of thousands of electricity customers in the area.

The news agency added that halting production will cost Tesla “a large hundred million euros.” On Tuesday alone, 1,000 cars were in an unfinished state at the plant.