Over the past few weeks investors and analysts alike have been watching every more Tesla has been making. We’ve all watched as sales have been suspended in a few states holding onto older laws and others have embraced the electric car manufacturer as the wave of the future. Now Tesla has set its sights on China as the next big market to shift sales into. Electric cars have seen success in Asia in recent years, and Tesla sees this success as an opportunity to gain ground in the Asian market. So how will Tesla find success in China and what does this mean for the company?
The Price of Tesla and Performance![tesla 1]()
The price of the Tesla model S in China is worth about $120,000 dollars per unit. Very similar to that of the cost found here in the U.S., before adding on the cost of import taxes, regional taxes, and shipping costs. But China’s car market is on the rise, just like China’s economy. There is wealth in China, wealth that Tesla can provide luxury and premium sedans to. Sales in the U.S. have stagnated, as well as the sales in Europe which has softened in recent months.
Last quarter was one of almost disappointment for Tesla, as U.S. sales slowed. The first quarter of this year, the company had projected to deliver an estimated 3,800 cars. They only delivered 700. So there are some concerns within the company on how Tesla will be able to compare to last year’s second and third quarter. Last year’s second quarter sold 5,100 cars and in the third quarter of last year, 4,500.
Tesla’s Stock
Tesla’s shares raised 1.2% on Tuesday. Since this time last year the overall value of Tesla’s shares are up just over 400%. Since the release of the Giga-factory the company is planning on building, analysts are speculating that value of Tesla stock will skyrocket in months to come.
Over the past couple of months, Tesla has been looking at possible sites for its soon to be new factory, somewhere in the south west either in New Mexico, Texas, or Arizona. The $5 billion dollar plant would open by 2017 and would produce Tesla’s famed lithium ion battery to be used not only in their vehicles but for industrial purposes as well. The plant would give Tesla the capability to produce batteries for over 500,000 cars in a given year.
![tesla]()
Success in Asia
The success of electric cars in Asia is not that of an untold secret. As the continent itself has continued to modernize, some of the most populated areas on the planet are looking for ways to mobilize their population at a lower cost. Many of the 1st world nations are eager to supply vehicles to these rising nations, with environmental reservations. While it would be profitable to equip over a billion people with cars, the amount of damage in pollution that could be produced also weighs heavy.
In India small cars like the ForTwo’s Smart Car, and electric versions of smaller cars are becoming the main competition for purchase. Tesla has wised up, perhaps sooner than most of the more established, conventional car manufacturers. The key to success in the electric car market is Asia, and the best place to break ground into that market is China. China has over one billion inhabitants alone. That means that the market is ripe for profit, as China’s economy swells with wealth. China has in the last decade become one of the largest economies in the world, so investing in China is clearly one of the best choices Tesla could make. On top of the cost of the car, one must remember that Tesla is American produced and American made, so in short – Tesla’s success almost directly adds to the U.S.’s gross domestic product. Success in Asia for Tesla, also becomes a success in the U.S. as well.
The future of Tesla is not an uncertain one, but rather an interesting one. Many question whether or not the companies constantly rising share prices are really a good thing. At the pinnacle of the recession the term “too big to fail” and are weary when they see a car manufacturer gain over 400% in share price just in a year. Seasoned and novice investors alike question whether the stock price will be able to grow or has it reached its apex? A good question but one very key fact remains, value rose sharply in the last year when only looking at the European and American markets. Should the company be able to operate in China as it does worldwide, it is possible that we could see within the next 5 years stock prices rise another 400% or better. One thing remains clear, Tesla’s success in China will define how the company impacts the industry and changes history.
Stay informed about the latest on investment information by getting on our FREE eMail list!
The post Tesla May Find Success in China appeared first on StockRockandRoll.