Tesla CEO Elon Musk tweeted that he'll break ground on a Tesla Shanghai factory on Monday, pushing ahead with efforts to bypass China tariffs on U.S. autos and to expand production. That comes after Tesla stock tumbled after Model 3 delivery figures fell short of estimates and the company cut prices on all of its models.
Looking forward to breaking ground on the @Tesla Shanghai Gigafactory today!
— Elon Musk (@elonmusk) January 7, 2019
Tesla (TSLA), unlike General Motors and many other global automakers, does not have its own production in China, the world's largest market for automobiles and especially electric vehicles. China recently cut tariffs on U.S. autos from 40% to 15%, spurring Tesla to cut China prices for its vehicles, but Elon Musk would prefer to bypass tariffs entirely.
XAlso, Tesla is running into production limits at its Fremont, Calif., plant. A Tesla Shanghai factory could help the company ramp up production. Elon Musk also is taking advantage of new China rules allowing foreign automakers to wholly own local production.
Tesla stock rose 1.5% before the open in Monday's stock market trading.
Tesla stock sold off last week after Tesla Model 3 deliveries hit 63,150 in the fourth quarter, missing estimates for 65,000. Tesla also cut prices on the Model 3, Model S and Model X by $2,000, partially offsetting the drop in tax credits that Tesla buyers will now get. But the reports raised concerns about Tesla demand.
Tesla Model 3 deliveries to China and Europe will begin in March and February, respectively.
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The post Elon Musk To Break Ground On Tesla Shanghai Factory appeared first on Investor's Business Daily.
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