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In May 2020, Tesla’s sales in China jumped back to over 11,000 Model 3 cars which made TSLA stock price skyrocket. Analysts are hopeful and optimistic that Tesla will show a strong performance in the Chinese market over the next 12 months.
On Monday, June 8, Tesla Inc (NASDAQ: TSLA) stock made a new record high for 2020 closing the day at $950 levels. The Tesla stock jumped 7.26% in a single day after it made a strong sales recovery in China, last month in May. With Monday’s move, Tesla has recovered back its previous levels after correcting 50% during the March 2020 market crash. Moreover, Tesla stock price has jumped 127% year-to-date and over 350% up in the last 12 months.
However, it’s worth noting that today in teh pre-market, Tesla (TSLA) stock price has already lost 1.99% and fallen to $931.
Industry reports show that Tesla has more than doubled its sales in May, compared to the month of April. In April, Tesla could barely manage to sell under 4000 Model 3 cars in China. This figure jumped to over 11,000 Model 3 cars sold in May last month. The China Passenger Car Association also said that Tesla’s were the best-selling new energy vehicles.
During its April earnings, the electric-car maker said that it would be slashing the starting price of its Model 3 sedans in China. This move was in response to boost the demand during this fragile economic market environment. Reportedly, Tesla had cut its Model 3 price by nearly 16%.
Analysts Remain Positive about Tesla Stock Price and Company’s Future
In an investor note on Monday, Wedbush analyst Dan Ives said that he remains positive on Tesla’s growth for the next year. He says that the demand for Tesla vehicles in China is ramping up quickly. Referring to Tesla’s factory in Shanghai, Ives said:
“We continue to believe EV demand in China is starting to accelerate with Tesla competing with a number of domestic and international competitors for market share with Giga 3 remaining the linchpin of success.”
“Strong Model 3 demand out of China remains a ray of light for Tesla in a dark global macro and appears to be on a run rate to hit 100k unit deliveries in the first year out of the gates for Giga 3 which is driving some strength for Tesla as well as Model Y deliveries starting to ramp as well,” added he.
Ives thinks that strong growth in China could see the Tesla stock adding $300 per share i.e. 33% from these levels over the next 12 to 18 months.
Earlier this year, Tesla has announced a target of selling 500,000 units by the end of 2020. However, as per Ives Tesla can still manage to pull-off 400,000 global deliveries despite the COVID-19 shutdown. Even Tesla has now updated its guidance for the 2020 vehicle delivery. The company has said that it will “revisit” its forecast in the second-quarter update.
Tesla’s Battery Supplier Makes Big Claims
In a new development, Tesla’s Chinese car-battery-maker Contemporary Amperex Technology said that it can build batteries capable of powering a car for 1.2 million miles. This is a massive claim considering most automakers offer warranties only between 60,000 to 150,000 kilometers.
Speaking to Bloomberg News, CATL chairman Zeng Yuqun said that they are ready to produce these batteries if they receive any industry order. He added that the new batteries will cost only 10% higher than their existing supplies. Earlier this year in February 2020, CATL has signed a two-year deal with Tesla to manufacture batteries for the Model 3.
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