Figures are for Tesla (TSLA) April shipments to China, and this is not what investors wanted to see.
Data from the China Passenger Car Association (CPCA) shows that Tesla sold 25,845 electric vehicles during the month. While this figure is higher than the 15,484 vehicles sold in January and 18,318 deliveries in February, it is consistently lower than in March, when 35,478 vehicles were sold.
Compared to domestic competitors Nio, Xpeng and Li Auto, market share growth has also remained unchanged. Wedbush analyst Daniel Ives believes that “several negative PR issues in China, linked to the well-discussed security issues, spy clamor and protest at the Shanghai Auto Expo,” played a role in the weak performance.
Additional questions are also likely to arise after the company suspends its plans to acquire additional land to expand its flagship Giga plant in Shanghai. Ives believes that behind the suspension of the project is “growing tensions between the US and China and tariff issues.”
In addition, manufacturing and logistics are under pressure from chip shortages, Ives said, making it difficult to “meet global demand.” In Europe, for example, demand “remains strong,” as evidenced by an additional 14,174 vehicles that the company delivered to this “key region” in April.
However, it is in China that Tesla “should play in the sandbox with Beijing and iron out the PR problems in the region that have been Tesla’s trick in the last month.” After all, this is the region that Tesla will be generating most of its revenue from in the next couple of years.
Despite weak data for April, Ives believes that demand in China puts Tesla at “300k + annual mileage,” and the country will account for roughly 40% of shipments by 2022.
Overall, Ives rates TSLA shares as the best (ie buy) with a target price of $ 1,000. Tesla shares have gone through a rough ride in 2021, and achieving Ives’ goal could generate ~ 70% return. (To view Ives’ track record, Click here)
Not all analysts on the street are optimistic about Ives’ outlook for the electric car giant, as TipRanks analysts show TSLA as a holdover. Based on a survey of 24 analysts over the past 3 months, 11 say Buy, 6 say Hold, and 7 say Sell. The 12-month average price target is $ 645.95, up 9.5% from the current level. (See Tesla Stock Analysis at TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the analyst. The content is for informational purposes only. Before making any investment, it is very important to do your own analysis.