Tesla to Begin Delivering First China-Made Model 3s on Monday

Tesla shares are trading near record highs as the electric vehicle maker prepares to begin delivering its first Model 3 vehicles made in China on Monday.
Author:
Updated:
Original:

Tesla (TSLA) - Get Report will be ending 2019 on a positive note as the electric vehicle company said it will begin delivering its first Model 3 vehicles built at its Shanghai factory on Monday. The factory only began being built at the beginning of the year and represents a major foray for Tesla into the world's biggest market for electric vehicles.  

In addition, Bloomberg reported on Friday that Tesla had won an exemption from a 10% purchase tax for its China-built Model 3 sedans. Earlier this month, Tesla had qualified for up to a 25,000 yuan ($3,574) subsidy for its China-built models. 

Tesla also agreed to a $1.3 billion loan from a consortium of banks in China that will help it expand production at its Shanghai factory, Reuters reported earlier this week.

The five-year loan will both rollover an existing facility and help Tesla expand the Shanghai plant, its first outside of the United States, towards it goal of producing 1,000 Model 3 sedans each week that will be sold in China.

Tesla shares on Thursday closed at a record $430.94, up 1.3% but were down 0.7% to $427.84 in morning trading Friday.

The gains on Thursday were driven by a note from Wedbush analyst Daniel Ives, who wrote that sales and demand for the company's Model 3 were on an "upward trajectory" in the fourth quarter.

Ives, who raised his price target on Tesla to $370 a share from $270, said in a note to investors that "if Tesla is able to maintain this level of demand and profitability going forward, especially in Europe and China, then the stock will open up a new chapter of growth and multiple expansion."

Consumer demand in both the U.S. and Europe should enable Tesla to meet its 2019 objective of 360,000 to 400,000 new-vehicle deliveries, Ives said.

However, Ives also said that many investors might feel uncertain despite Tesla's rally, Barron's reported. Every time optimism for the stock grows, Ives said, some problem arises.

"2020 represents a pivotal year" for CEO Elon Musk and the company, Ives wrote.