Struggling in China
Analysts met Tesla’s key business management personnel in Shanghai, where they noted that the company is not seeing any boost in sales yet. Guided by its policies, Tesla has always refrained from revealing the breakdown of its sales numbers country-wise. According to the analysts, Tesla has high inventories in China despite constant efforts from the company to overcome its failed entry into the world’s largest auto market.
In April of last year, the company launched the Model S in China with much fanfare, but later CEO Elon Musk himself acknowledged that the initial sales were not as expected. Musk stated that the main hurdle is convincing skeptical Chinese consumers who are cautious about inadequate charging facilities in the country. Since then, the company has been laying off workers and reshuffling its top management in the country to consolidate and improve operations in China.
Tesla working to boost charging infrastructure
Also CLSA did mention analysts who hold the view that Tesla needs to work harder in order to increase awareness among Chinese consumers about the company’s superior EV charging technology and improving EV charging infrastructure in the country.
Tesla entered into a partnership with local real estate developers as part of its destination charging program, which will help it put superchargers in public buildings, malls and hotels. The Palo Alto-based company is also offering free home charging equipment to every Chinese customer who has a garage. Also, recently the EV manufacturer announced plans to customize its vehicle to meet Chinese charging standards.
Barclays PLC analyst Brian Johnson is also cautious on Tesla’s battery business and its auto business. Though Johnson reiterated his $190 price target, he sees short term momentum “ahead for the stock as buzz continues to build around the battery business and with the Model X launch approaching.”
On Monday, Tesla shares closed down 0.04% at $248.75, and year to date, the stock is up by almost 12%.