Shares of Apple and Tesla have dropped due to growing concerns over delays on their production lines in China.
Apple’s stock has reached its lowest level since June 2021. Tesla’s shares have fallen 73% from their record high in November 2021.
Both companies have struggled to maintain production in China due to Covid restrictions and weeks of lockdowns.
Given the surge in Covid cases in key manufacturing centers, analysts say it will take time to resume production.
“Factories will face a labor shortage for at least 4-6 weeks as the wave passes through their production regions, and of course, most migrant workers will return to their hometowns at the end of January,” said Simon Baptiste, chief economist at The Economist Intelligence Unit.
“Production is unlikely to return to normal in China until the end of February.”
Tesla’s Shanghai factory reduced production as Covid cases increased in China. The company declined to comment.
However, analysts point out that the sluggish sales are evident in the fact that the company is offering discounts to both Chinese and North American customers.