Yahoo Finance Tesla (TSLA) to Open Doors of R&D Site in Chinese Capital
Tesla Inc. TSLA is reportedly establishing a new company in Beijing (China) for its research and development (R&D) purposes with an initial capital investment of $2 million. The new set-up will be under Tesla’s subsidiary, Hong Kong Tesla Technology Ltd., and has been named Tesla (Beijing) New Energy Research and Development Co. Ltd.
This new development follows the company’s last-month announcement to build a new factory in China. Further, the company’s CEO confirmed that Tesla will pump in large investments to make the factory ready for production around 2020.
Per a draft proposal, China intends to allow foreign automotive companies to produce electric vehicles in their free-trade zones without joining any local partner. This development has encouraged Tesla to open its first manufacturing plant in China.
Tesla Inc. Price and Consensus
Tesla Inc. Price and Consensus | Tesla Inc. Quote
China’s pledge to ban combustion engine cars by 2030 and focus on promoting electric vehicles makes it a potential market for Tesla. Moreover, unveiling a plant in the country will enable the company to lower its logistics cost.
At its upcoming production site in China, the company has plans to manufacture Model 3 and possibly Model Y cars to cater to the demand of the Chinese market and neighboring nations. However, the factory won’t be producing any Model S or Model X car.
Currently, Tesla manufactures its vehicles only in California. However, the final assembling of a few vehicles is done in Netherlands too.
Price Performance
In the last three months, shares of the company have underperformed the industry it belongs to. The stock has lost 10.1% against the industry’s 5.9% gain during the period.
Zacks Rank & Key Picks
Tesla carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the auto space include Cummins Inc. CMI, American Axle & Manufacturing Holdings, Inc. AXL and Navistar International Corporation NAV, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cummins has an expected long-term growth rate of 12.2%. The stock has seen the Zacks Consensus Estimate for current-quarter earnings per share being revised 2.4% upward over the last 30 days.
American Axle has an expected long-term growth rate of 8.1%. Over a month, shares of the company have been up 1.7%.
Navistar has an expected long-term growth rate of 5%. Its shares have been up 19.1% in the last three months.
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