Coronavirus derails Tesla rally, sends stock down 20 percent

Investors slammed the brakes on Tesla shares Wednesday, sending them down as much as 20 percent after the electric car maker confirmed the coronavirus outbreak has sparked a production hiccup in China.

Tesla’s stock is up more than 70 percent since the start of the year, fueled in part by Tesla’s announcement last month it had begun delivering the first Model 3 sedans built at its new Shanghai Gigafactory.

But that factory has been shuttered this month after the outbreak of the coronavirus, which has become a worldwide epidemic and killed nearly 500 people in China. The closure will impact Chinese deliveries of Tesla vehicles, company VP Tao Lin said Wednesday.

“The proposed delivery in early February will be delayed,” she said on popular Chinese social network Weibo, according to a translation by CNBC. “We will catch up the production line once the outbreak situation gets better.”

During its earnings call last week, Tesla told analysts that the factory will not reopen for at least another week.

Shares were down 17 percent to $734.70, more than erasing all of the previous day’s 14 percent gain.

Still, Tesla shares are up nearly 25 percent since its Jan. 29 earnings report, in which it said it expects to “comfortably exceed” 500,000 vehicle deliveries in 2020. The stock is also still 185 percent higher than it was in late October, when it reported a surprise profit that jump-started its rally.