Tesla Motors, Inc.
) announced that it will be manufacturing cars in China in the
next 3 to 4 years. The company is also beginning the delivery of
Model S in the country this week. Tesla started taking
reservations of the Model S in China as of Aug 2013.
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Tesla's initiative to manufacture in the nation is likely to help
it in long run. The 25% import tariff charged on vehicles sold in
China can be avoided once local production commences. This will
slash vehicle prices in the nation, and will likely boost sales.
Model S is priced at $118,000 in China, inclusive of shipping
charges, value-added taxes and import duties. Tesla is also
working to attain China's electric-car subsidies which will help
offset these additional costs.
Tesla is focused on expanding in the world's largest automobile
market, China. The company is also planning to establish new
stores and service centers in the nation. Additionally, the
automaker has plans to construct battery charging stations in the
country, and superchargers in Beijing and Shanghai.
Tesla plans to inaugurate 10 to 12 stores in China by the end of
2014, one of which is its flagship 800-square-meter store in
Beijing which was opened in Nov 2013. The electric carmaker
expects China to account for 30-35% of its global sales growth in
Tesla currently carries a Zacks Rank #4 (Sell).
Some better-ranked automobile stocks worth considering are
Toyota Motor Corp.
Fox Factory Holding Corp.
). Toyota sports a Zacks Rank #1 (Strong Buy) while PACCAR and
Fox Factory carry a Zacks Rank #2 (Buy).