Investor's Corner
Tesla (TSLA) denies China’s alleged 70% sales drop in October: ‘This is wildly inaccurate’
After its strong performance on Monday, Tesla shares (NASDAQ:TSLA) are exhibiting some volatility amid reports that its electric car sales in China experienced a steep 70% drop last month. The figures, which were reportedly provided to Reuters by an official from the China Passenger Car Association, alleged that Tesla only sold 211 vehicles in the entire country during October.
A Tesla spokesperson has issued a response to the publication’s report, stating that the quoted figures were inaccurate. The spokesperson further clarified that while the company does not disclose regional or monthly sales figures, the alleged 70% drop in October’s electric car sales was “off by a significant margin.”
“This is wildly inaccurate. While we do not disclose regional or monthly sales numbers, these figures are off by a significant margin,” the spokesperson said.
Due to the ongoing trade war between the United States and the Asian country, imported vehicles such as Tesla’s Model S and Model X are given a steep 40% tariff. This gives the cars a distinct disadvantage against local competitors, which are far more affordable. This was pointed out by Tesla in its third quarter vehicle delivery and production report, where the company noted that the Model S and X’s figures remain stable despite “headwinds (that) we have been facing from the ongoing trade tensions between the US and China.”
In an announcement earlier this month, Tesla noted that it would be cutting the prices of the Model S and Model X in China by 12-26% despite the 40% tariffs still being in effect. Even the prices of the Model 3 Performance and the Long Range Model 3 AWD, which are currently available for ordering among Chinese reservation holders, were adjusted. Explaining its strategy, Tesla noted that it would be “absorbing a significant part of the tariff to help make our cars more affordable for customers in China.”
Despite the ongoing trade war between the US and China, Tesla commands a strong following among consumers in the country. Prior to the 40% tariffs taking effect earlier this year, for example, China’s Customs Tariff Commission under China’s cabinet decided to cut import duties from 20-25% to just 15%. Tesla responded promptly to the country’s announcement then, reducing the prices of its electric cars. The reaction from consumers was immediate, resulting in a Tesla store in Shanghai clearing out its entire Model X 75D inventory in 24 hours. The reception to the Model 3, which was exhibited in multiple key Chinese cities this month, has been very encouraging as well.
Tesla’s decision to absorb a part of the 40% tariffs on its vehicles could ultimately prove to be a strategic decision that could address a short-term challenge facing its operations in the country. The company, after all, has noted that it is accelerating the construction of Gigafactory 3 in Shanghai, which would be capable of manufacturing both batteries and electric vehicles. Tesla notes that the Model 3 and Model Y would be produced in the Shanghai site, with the cars being sold to the local market. With such a system in place, Tesla’s vehicles would be able to compete against locally-made electric cars on even ground.
Tesla shares, which finished Monday’s trading up 6.2%, were down 2.22% as of writing, trading at $338.33 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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