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America’s electric-car automobile giant Tesla manages to beat the market meltdown making higher sales in March in comparison to February. The company is also preparing itself for any economic downturn ahead.
While the global economic meltdown is pushing businesses to an edge, the rules of the game don’t apply to Tesla Inc (NASDAQ: TSLA). As per the China Passenger Car Association (CPCA), Tesla made record sales in the month of March. In March, Tesla sold a total of 10,160 vehicles, 150% up from its February sales of 3,900.
Tesla Performance and Sales
This surge in sales comes despite Tesla keeping its production on halt for a major period at its Shanghai gigafactory. CPCA’s secretary-general Cui Dongshu said that Tesla alone contributes 30% to all the battery-electric vehicle sales in entire China. As per its goals, Tesla plans to unveil around 150,000 Model 3 sedans from its Shanghai gigafactory.
Tesla CEO Elon Musk announced the commencement of the Shanghai gigafactory production facility earlier this year in January 2020. However, with the Coronavirus outbreak emancipating from China’s Wuhan city in January, Tesla has to shut down its factory periodically. But with some help from local authorities, Tesla could start its production unit soon.
Upon resuming its production in February, Tesla surpassed its pre-production facility of 3000 cars per week. But it is not that things are going all hunky-dory for Tesla at this moment. To meet the financial challenges posed by the global meltdown, Tesla has decided to cut its executive salary by 30%.
This move is made towards having a conservative spending approach amidst the shrinking global economy. Currently, widespread COVID-19 cases in the U.S. have also put Tesla’s operations for a temporary halt. However, the company is using its production facility in Fremont, California, for making ventilators for coronavirus patients.
Analysts View on Tesla (TSLA) Stock Price
The Tesla (TSLA) stock price has remained the talk of the town this year in 2020. In the first 40 days of 2020, the Tesla stock climbed 100% to move above $900 by mid-February. During the same period, Tesla also became the world’s second-largest automobile maker crossing $150 billion valuations.
However, with the global markets correcting, Tesla has also lost 30% of its market since attaining its 2020-peak. As the Tesla stock remains volatile, analysts remain divided over its future. Since many analysts are eyeing for an impending economic recession ahead, there are several parallels drawn with the 2008 financial crisis. Baird analyst Ben Kallo told TipRanks that even after the 2008 recession, automakers took five years to recover.
However, he thinks that Tesla will recover faster in comparison to its competitors considering its dominant position in the emerging electric automobile industry.
“That said, we do think TSLA could fare better than luxury peers, with new products/geographies driving growth, a potentially widening EV competitive advantage, and OTA updates keeping vehicles fresh”, said Kallo.
Yesterday, TSLA stock was 4.40% up trading at $573. The market cap is 105.49 billion.