Tesla Slides on Shanghai Expansion Halt Report, Slowing China Car Sales

"Do you want Tesla to accept Doge?" founder and CEO Elon Musk asked his 54 million Twitter followers Tuesday.
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Tesla  (TSLA) - Get Report shares extended their recent declines Tuesday following a report that the clean-energy carmaker has halted plans to expand its Shanghai gigafactory amid tensions with officials in Beijing. 

Shares were also pressured by data from the China CPCA which showed Tesla selling 25,845 cars in April, down 27.1% from the previous month.

Reuters reported Tuesday that Tesla had looked into the idea of expanding its Shanghai operations -- which currently has a production capacity of 500,000 cars a year -- into a global export hub that would ultimately send Model 3 sedans to the U.S. market. 

Levies on China-made cars imported into the U.S., first introduced by President Donald Trump, as well as Tesla's broader effort to placate officials in China amid a broader crackdown on technology companies and the collection of customer data, Reuters reported. 

Tesla's ongoing plans to launch a second overseas gigafactory in Berlin are also facing delays, a report from the Germany weekly Automobilwoche indicated earlier this month, following a series of setbacks linked to permitting and approvals from local and federal government officials. 

Tesla shares, which have posted gains in only two of the last ten trading days, were marked 4.3% lower in early trading Tuesday to change hands at $602.00 each.

Founder and CEO Elon Musk also re-inserted himself into the cryptocurrency news cycle by asking his 54 million Twitter followers if Tesla should "accept Doge" as a form of payment, just three days after he called the digital token a "hustle" on Saturday Night Live, comments that triggered a price collapse that erased a third of its value.

Last month, Tesla said its new gigafactories -- one in Berlin and the other in Austin -- will likely come online later this year, but provided few details as to when, and at what rate, production would begin, apart from Musk telling investors that 2021 output would be "limited".

The update followed a stronger-than-expected first quarter earnings report that included revenues of 10.39 billion and Street-beating earnings of 79 cents per share.

The carmaker's bottom line, however, was flattered by the sale of regulatory credits and bitcoin, which earned the group a bit more than $100 million.

In terms of vehicle sales, Tesla said it delivered 184,800 new cars over the three months ended in March, a record total that included the production of 180,338 Model 3s and Model Ys.

China accounted for around 37.5% of that total, with the China Passenger Car Association (CPCA) showing the first-quarter tally of 69,280 units sold in the world's largest car market following the launch of its Shanghai gigafactory in 2019.