Tesla Stock Plunges After ‘Printer Error’ Delays Model 3 Shipment Release In China

Overzealous Chinese customs officials and an innocuous “printer error” that delayed the release of 1,600 Tesla Model 3 electric cars in Shanghai triggered a 5.2 percent drop in the share price of Tesla Tuesday at the Shanghai Stock Exchange.

The cars have since been released, however, and Tesla’s share price has recovered somewhat from the snafu that began immediately after Chinese media outfit Caixin Media reported the delay. Unfortunately for Tesla, Tuesday’s slump saw its stock price plunge to its lowest level since October 2018. Prior to the incident, trading volumes for Tesla jumped to levels not seen in months in anticipation of the arrival of the first Model 3s in China.

Tesla said sales of its Model 3 in China weren’t affected by the snafu.

Caixin Media reported that Customs officials in Shanghai saw "various irregularities" (including improper labeling) in 1,600 Model 3's set to be released from Shanghai.

"Some of the vehicles had no Chinese labels on brake fluid tanks, while some demonstrated a real motor capacity that differed from the one on the label," reported Caixin.

A Tesla spokesperson said the company traced the issues to a printer error. This error has since been corrected.

"This error resulted from misprinted labels on certain Model 3 vehicles," said the spokesperson.

"We have already reached a resolution with Chinese customs, and we are working closely with them to resume clearance procedures on these vehicles. Sales of Model 3 in the country are not impacted, and we continue to deliver Model 3 vehicles that have already been processed.”

The spokesperson also said Chinese Customs officials are now allowing Tesla to import Model 3 sedans into China.

China is a huge market for Tesla given it’s the world’s largest market for electric vehicles (EVs). Tesla also enjoys a huge competitive advantage over Chinese EV makers, none of which are expected to market an electric car capable of competing against the Model 3 for the next few years.

Tesla is unique among U.S. automakers in that all of the EVs it sells in China are made in the USA. Tesla, however, is rectifying this situation with the construction of its mammoth Gigafactory in Shanghai starting in a few months.

“We need to bring the Shanghai factory online,” said CEO Elon Musk last month during an earnings call with investors. “I think that’s the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We’ve got import duties, we’ve got transport costs, we’ve got higher costs of labor here.”