Only 10 months after breaking ground on its ‘Gigafactory’ in Shanghai, which is the first completely foreign-owned car plant in the country, Tesla unveiled its first China-made electric vehicles for purchase Monday. Despite hitting this milestone, the company’s stock sunk on speculation the company will miss 2019 delivery expectations when Q4 numbers are released.
The first Model 3s off the line for customers went to 15 employees who received them during a ceremony Monday. Tesla ($TSLA) posted photos of the “happy” gathering on the social media site Weibo. Trial production began in October 2019. Tesla has 36 retail stores and 300 charging stations in China.
Only a day before the Shanghai factory celebrated the new Teslas, Cowen analyst Jeffrey Osborne told clients that he expects Tesla to announce it delivered fewer than expected electric vehicles this year. While Cowan raised the fourth quarter delivery estimate to 101,000 from 95,000, which would put 2019 delivery total at 356,000 vehicles, that number is still “slightly missing” the guidance range of 360,000-400,000 vehicles. Osborne said he had raised Q4 estimates due to strength in the Netherlands and China ahead of subsidy changes.
A note to clients also said, “We continue to see risks to the company’s growth story,” to an expected increase in competition.
Tesla’s stock dropped almost 5 percent Monday, which is its biggest drop in a month, after Cowen’s note became public.
While Tesla’s growth skyrocketed in 2019, it has also raised concerns for investors. The company has faced SEC investigations into founder Elon Musk’s tweets and manufacturing issues for the Model 3..
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Tesla reported a surprise increase in sales in the third quarter as the electric car maker likely benefited from a rush by consumers to take advantage of a $7,500 credit before it expired on Sept. 30. The company reported Thursday that sales in the three months through September rose 7% compared to the same period a year ago. The gain follows two quarters of steep declines as people turned off by CEO Elon Musk’s foray into right-wing politics avoided buying his company’s cars and even protested at some dealerships. Sales rose to 497,099 vehicles, compared with 462,890 in the same period last year.
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