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Tesla (TSLA) stock price was slightly down on Friday. Tesla has asked the Chinese government for approval to build Model 3 cars in the country with LFP batteries.
Tesla Inc (NASDAQ: TSLA) stock prices dipped at the end of trading on Friday by 1.3%. This occurred as Tesla wants to work with a new Chinese battery supplier for its lithium iron phosphate (LFP) batteries. On Friday, Tesla (TSLA) stock price was at $816.88, having lost $10.72. After hours TSLA was slightly up at $817.60 (+0.088%).
Sources say that the Elon Musk-led company have approached the Chinese Government. They have asked for permission to build Tesla Model 3 vehicles with lithium-ion phosphate (LFP) batteries.
The name of the supplier is unknown for now. According to sources, Tesla (TSLA) had been in talks with CATL. This was to use LFP batteries that don’t have Cobalt.
Tesla (TSLA) Stock Price Drops as the Company Seeks to Use LFP Batteries for Model 3
This move has been seen by pundits as a move to drive down production costs. Cobalt is expensive. Manufacturing batteries without cobalt will drive costs for the Automaker.
The EV maker is seeking ways to drive down its manufacturing costs. This comes as incomes globally are shrinking due to the effects of the COVID-19 virus. It will also play well for the budget-conscious Chinese who will look to buying an EV.
Tesla’s Shanghai Gigafactory has already started manufacturing the Model 3. Tesla has also received an expansion credit line of 4 billion Yuan ($565 Million). This shows that the Tesla business model is still going strong. This is despite the COVID-19 pandemic.
Going forward, Tesla will be looking to reclaim its revenues. The coronavirus situation caused a 64% decline in Model 3 sales in China in April as opposed to March. This is according to the China Passenger Car Association (CPCA). The trade body also indicated that the markets were bouncing back. This is after the COVID-19 pandemic had slowed things.
Tesla (TSLA) stock prices have been on the uptrend despite the crisis. Stocks have seen values rise by more than 200%. CEO Elon Musk has been known for his unpredictable attitude.
Tesla (TSLA) stock prices lost about $14 billion after a recent tweet by Musk. He had indicated that the stock was “overheating”. Elon has caused issues for Tesla because of his inadvertent tweets.
Musk at the beginning of the month had quarreled with Alameda County Officials. The disagreements had to do with the reopening of Tesla’s Fremont California facility. Both sides finally came to a compromise and the factory reopened.
New Opportunities Abound for Tesla
As the company seeks to promote it’s Model 3, opportunities to improve Tesla’s production cycle abound. This is one of the reasons why the brand seems set to grow.
Electric vehicles offer several distinct advantages that hydrocarbon cars don’t. They have zero emissions, have greater lifespans, and also are quite cool.
We live in an age where the economics of owning a gasoline car may not make sense. Electric vehicles may soon have their day. From the looks of things, Tesla (TSLA) seems poised to lead the pack.
On Coinspeaker, you can also read about other transport industry news.