Tesla is hot in China. According to a recent report, Elon Musk wants to build a factory in China. The demand for battery-operated vehicles continues to gain momentum while Trump tries to make a better deal with China. The Chinese claim there will be millions of battery-operated vehicles in cities across China by 2024, and Musk wants a big piece of that market. Musk wants to build a Chinese factory to bring the retail price down in China.
But Tesla has its fair share of challenges in the United States. Back in the days when Tesla stock was still in the startup category, it was a hot tech commodity. Today, Tesla shares aren’t on every tech investors radar. According to Craig Irwin, a Roth Capital Partners analyst, investors look at margins and volume more than the startup hype these days. In other words, investors look at business fundamentals instead of the rock star status of Elon Musk.
Musk introduced the Model Y SUV at the Tesla design center, and according to the car gurus, the Model Y is a bit boring. The Model Y will set electric car buyers back $39,000 to more than $60,000 depending on the extra features. The SUV features a panoramic glass roof, 66 cubic feet of cargo space, and seven seats. The Model Y is 10 percent bigger than the mid-size Model 3 sedan. But some buyers didn’t like the Model Y’s delivery date. It won’t be available until the beginning of 2020. The big-ticket Model Y won’t hit retail until 2021.
According to Bloomberg.com, the Model Y may help Tesla pick up some of the $7.4 billion in market value it lost this year. The company is worth $50 billion right now, but there’s danger dead ahead when Ford jumps into the electric vehicle business with both feet, according to market analysts. More competition will have an impact on profit margins. Musk knows he has to come up with more auto-sizzle and better prices to keep Tesla ahead of the competition.
But the model Y did get great reviews from test drivers. The Model Y handled better than a regular SUV, and that will help keep people interested in Tesla when GM, Ford, Honda, and Toyota get into the electric SUV business. Tesla executives think the Model Y will account for 15 to 20 percent of Tesla sales in the next three years. That should give Tesla’s stock a shot in the arm, according to analysts, but anything can happen in Elon Musk’s automotive world.
Dil Bole Oberoi
