A 27% decline in sales within a month shows a decreasing demand for Tesla products in China amid increased competition from local electric vehicle companies.
Tesla Inc (NASDAQ: TSLA) stock closed Tuesday trading at $617.20, down 1.88% from the day’s opening price. Meanwhile, the dip continued during the pre-market session as it was down approximately 0.41%. The Tesla stock dip was attributed to the drop in China sales during April, whereby the company reported to have sold 25,845 China-made vehicles in April, which was down approximately 27% from 35,478 in March according to a report by the China Passenger Car Association.
Market data provided by MarketWatch indicates Tesla stock has declined 12.54%, 27.33%, 19.04%, and 8.37% year to date, three months, one month, and five days respectively. However, in the past twelve months, Tesla stocks have added approximately 281%.
Notably, the company has a reported market valuation of approximately $605.97 billion, with around 963.33 million outstanding shares. Having reported a declining sale in China, one of its major markets, Tesla analysts have not yet decided whether to enter a bullish call or sell pressure in the coming months.
According to a survey conducted by MarketWatch, Tesla stock received an average of a Hold rating from 36 ratings. Momentarily, most analysts are not sure of what to expect from the ongoing coronavirus pandemic that has significantly disrupted global economies and the supply chain.
Tesla Stock Reacts to the Report by China Passenger Car Association
Tesla stock may continue to be adversely affected by the growing tension between China and the United States. Incidentally, Tesla just announced that it has halted plans to expand its Shanghai manufacturing plant by purchasing more land.
Tesla Gigafactory in Shanghai was designed to manufacture up to 500,000 cars per year. From its design, the factory has the capacity to produce Model 3 and Model Y vehicles at a rate of 450,000 total units per year.
A 27% decline in sales within a month shows a decreasing demand for Tesla products in China amid increased competition from local electric vehicle companies. One of the biggest Tesla competitors is Nio Inc (NYSE: NIO) which plans to scale its production in China and abroad.
According to the China Passenger Car Association report, Tesla exported 14,174 units of electric vehicles from its Shanghai Gigafactory in April. Forward, Tesla sales in China are expected to be bolstered by over 60,000 new registration plates for energy-saving vehicles in Beijing.
Notably, the Chinese market remains a vital focal point for Tesla’s global reach as it made approximately $3 billion in sales during the first quarter, representing 29% of the total global sales.
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