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Tesla (TSLA) +3.7% despite drop in China car sales in January
Tesla (TSLA) traded 3.7% up on Monday even as new data from the CPCA showed that its car sales dipped 15.5% in its biggest market, China, last month.
New data showing that Tesla (TSLA) sold fewer vehicles in its key Chinese market in January amid capacity problems linked to its supply chain did little to deter investors as its shares rose 3.7% on Monday.
Tesla sold just shy of 60,000 vehicles last month according to the China Passenger Car Association (CPCA), which is a 15.5% drop from the figure in December, though that did amount to a record 70,847 units.
The Elon Musk-helmed firm has struggled with supply chain disruptions in recent months and admitted recently that those issues will crimp the production capacity of its giga factories.
CFO Zach Kirkhorn revealed in a post-Q4 conference call that Tesla’s factories in Freemont and Shanghai were running “below capacity” and its growth this year will depend on the extent to which its supply chain and logistics problems improve.
With overall car sales in China declining only 1.4%, it will be less disappointing for Tesla, as its rival NIO (NIO) recorded an 8% fall in January,
Crisp Idea analyst Nanda Sai is not concerned and believes that the Shanghai factory has already enabled Tesla to make more Model 3 and Y electric vehicles, which is “assisting top-line growth”.
Sai added that Tesla is working hard to increase production rates as she reiterated a buy rating and $1,087 price target, which is on the upside of the current price.
Despite the staggered sales, Tesla shares moved higher on the Nasdaq, with the 3.7% advance increasing the price to $892.00.
This is some way short of the 52-week high of $1,243.49 and is not enough to eliminate its six-month decline, which stands at -15%.
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