Before Monday's trading, the media reported that$Tesla (TSLA.US)$The plan to cut production at the shanghai superfactory by as much as 20 per cent sparked concerns that demand in the region was weakening and its share price fell more than 6 per cent. Tesla, Inc. then denied the rumors, pointing out that the report of the production reduction was "untrue".

With the emergence of strong domestic competitors such as BYD, the competition in China's electric vehicle market is becoming more and more fierce, so Tesla, Inc. is facing more pressure.

Regardless of whether the reports of the production cuts are true or not, Tesla, Inc. shareholders' anxiety about the Chinese market is rising significantly, but fierce competition in the region is unlikely to be a driver of the production cuts, Piper Sandler analyst Alexander Potter said in a report.

"if Tesla, Inc. finally decides to cut production, we think it should be attributed to the macro economy and the new factory in Berlin, not competition from our Chinese counterparts," Potter said. Due to factors such as macroeconomic instability and the epidemic, Tesla, Inc. 's success will have a negative impact on himself: as local production in Europe begins to increase, these cars are likely to cover buyers with a purchasing power of more than $50, 000, thereby reducing reliance on factories in other regions to export cars. "

If this is the case, Potter believes that it is possible for Tesla, Inc. 's Shanghai factory to reduce production. However, he expects a price cut to be a more logical and likely option for the company.