Elon Musk, Chief Executive Officer at Tesla, is continuing to make strides with its global expansion plans after the company beat its deadline to making cars in China. Analysts from Saikyo Sakura Assets noted that Tesla’s new Gigafactory which is built in Shanghai, has already started its trial production.
Tesla is expected to make an announcement towards the end of the year of the location of its next Gigafactory, which will be based in Europe.
With the expansion into China, the world’s largest car market, it is looking to provide millions of potential new customers which will likely be a crucial milestone in the company’s history paving the way for future models.
“It’s remarkable how fast this Shanghai factory has come since it was only around ten months ago that they started the plant, with a recent letter to its shareholders it stated that this facility was 65% cheaper to build its Model 3 compared to its plant in America.” Commented Frank Hunter, Head of Corporate Derivatives at Saikyo Sakura Assets.
Investor sentiment has changed while the stock was down over 23% for the year, however, with recent strong earnings including an unexpected profit, the company’s stock rallied over 20% during trading hours on Wednesday.
“Tesla already has strong brand recognition all over the world. However, there is fierce competition in China for electric cars. Tesla has been known not to spend any capital on marketing and rather let the car speak for itself; they will need to rethink their marketing strategy in China” added Anthony Brown, Head of Wealth Management at Saikyo Sakura Assets.
Financial analysts from Saikyo Sakura Assets have noted that Tesla’s first goal was for the Shanghai factory to produce a quarter of a million vehicles per year, before it looks to build half a million vehicles per year.
About Saikyo Sakura Assets
Saikyo Sakura Assets provides investment advisory services to private retail individuals and corporate institutions. Saikyo Sakura Assets currently holds over $6.32 billion U.S. dollars of assets under management. Established in 2011 the company operates from its headquarters based in Osaka, Japan, it also has a dedicated in-house research facility based in Busan, South Korea.