The Tesla share is stopped

Tesla expansion plan for China stopped? Big bank expresses doubts about the stock market report

The news for Tesla from China doesn't seem to be getting better. From mid-April, a wave of critical media reports poured out on the company after a customer protested at a trade fair about allegedly failing brakes on her Model 3, and from March his electric cars were no longer allowed to enter military complexes because of the built-in cameras park the country. This week it was announced that China sales had slumped by two thirds in April, and a news agency reported that Tesla had given up on expanding the local gigafactory to include additional space. In the eyes of analysts, the latest two points are not as dramatic as they were apparently perceived on the stock market.

J.P. Morgan doubts Tesla report

There was initially confusion about the Chinese Tesla numbers in April because the CPCA association was also including exports from the local Gigafactory for the first time. As a result, they have to be deducted from the total value of 25,845 Model 3 and Model Y in and more recently from China in April in order to reach domestic sales. In March 2021, it was 35,478 electric cars; in April, excluding exports, there were only 11,671 Teslas sold in China from the company's own Gigafactory.

An analyst from Piper Sandler said this was not overly worrying because Tesla was beginning to show a quarterly pattern in China that was similar to that of its Fremont electric cars: many exports and thus delayed sales in the first two months and a strong third in which they exported Electric cars arrive at the same time as those produced later for nearby markets. The bad press in China could have harmed Tesla, but the April figures alone cannot tell to what extent, the analyst noted.

In a similar way, another major bank put another China report into perspective on Wednesday that sounded like problems for Tesla. The company had canceled its participation in a land auction near the existing Gigafactory in the country, previously reported the news agency Reuters. There it was planned to set up production of an additional 200,000-300,000 electric cars per year, which Tesla also wanted to export to the USA. However, due to persistent geopolitical upset and import tariffs, this plan was abandoned.

The investment bank J.P. Morgan commented on this, as can be seen from excerpts of a comment from her on Twitter. Interestingly, the brief analysis does not come from your responsible Tesla analyst, who sees the share as one of the most negatively of all. Instead, the team spoke up for Chinese electric car suppliers, some of which are also related to Tesla.

"No need to worry"

The Reuters report on the stopped China plans is described by him as "old and imprecise". Local media reported in early April that Tesla had withdrawn from the land auction. The analysts determine that the message is also incorrect from the fact that Tesla has never officially confirmed the expansion next to the Gigafactory. In addition, the company informed the agency that the further development in China is proceeding as planned. “No need to worry,” says the supplier team at J.P. Morgan with a view to Tesla in China. For the slump in domestic sales in April, it gives similar explanations as previously the analyst from Piper Sandler, who currently has the highest price target for Tesla shares at $ 1,200.

The fact that Tesla does not stand still in China was shown on Thursday by the state publication Global Times on Twitter. In quick cuts, there is a lot of activity around the gigafactory in the country, including dredging and grading work on new areas. The expansion of the factory was in full swing, read the headline.

Tags: stock, stock market, China, Tesla