Tesla Edges Closer To Its First Production Plant In China

Angelica Greene
June 20, 2017

The agreement reportedly being worked out with municipal authorities in Shanghai will enable Tesla to build a factory in Lingang Development Zone. An official announcement could come as soon as this week, but details are still being finalized and the timing could change, the report said. Reporters noted that, according to Chinese law, it will be a joint venture with a local partner. As of now, there have been no comments from Tesla on the matter.

Tesla executives reportedly visited the Suzhou region in China previous year to discuss a manufacturing facility, the popular electric vehicle news site Electrek reported. The electric vehicle producer reported ($1.97) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.67) by $1.30.

Further, assembling vehicles locally would allow the company to avoid a 25 percent tax, the report said. Government support helped China surpass the U.S.in 2015 to become the world's biggest market for the non-emission autos. Oppenheimer Holdings, Inc. reaffirmed a market perform rating on shares of Tesla in a research report on Friday, February 24th.

Stock is now moving with a positive distance from the 200 day simple moving average of approximately 48.82%, and has a solid year to date (YTD) performance of 73.05% which means the stock is constantly adding to its value from the previous fiscal year end price.

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Tesla is finalizing negotiations with the authorities of Shanghai the agreement on the construction of his plant. Calls to the company's investor relations office weren't answered. Having a presence in the world's largest electric vehicle market is a critical next step for Tesla as it seeks to scale production globally. In the USA, consumers stood in long lines to place $1,000 deposits for the vehicle.

Speculations regarding such a deal started in March when Tencent purchased a 5% stake in the US firm.

Chinese authorities have made new-energy vehicles a priority, classifying them as a strategic emerging industry, with hopes of increasing sales of hybrid vehicles and fully electric cars 10-fold in the next decade. The Elon Musk-led automaker has already expressed its ambitious plan to set up about three to four new Gigafactories across the globe. The estimated cost of its battery gigafactory near Reno, Nevada, is expected to reach about $5 billion.

Other reports by GizPress

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