Speculations on Tesla’s second car plant in China going strong

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Massive speculations are going around that tesla might be building a second car plant in China. However, the sales of the company’s vehicles have been pretty low in the first quarter of 2021. The media has also been criticizing and questioning the company vehicles and the company’s data gathering and storage practices. They have raised concerns about the demand for the technology.

However, some analysts still predict that Tesla may end up exporting more cars from China to Europe. If it does that it will mark a swift reversal of fortunes for Tesla. After the Shanghai auto show, Morgan Stanley’s Adam Jonas acknowledged that investors were dialing back their enthusiasm about the company’s China prospects.

“We expect to see the narrative around Tesla for the remainder of the year to be one word — EXPANSION,” wrote Jonas in an April 22 report. He referred to the possibility the company would go beyond constructing new plants in Texas and near Berlin and could build another factory in China.

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However, Tesla is yet to comment anything regarding this new development and the report cited an unidentified person familiar with internal data. China’s Passenger Car Association will release information next week about sales for May.

According to sources, Tesla’s sales of locally made vehicles dropped more than a quarter in April from March. Of the 25,845 vehicles sold, more than half were exported.“We did see a drop in sales. Increasing exports will be a good offset strategy if China’s order growth remains weak, as Tesla’s German factory is still in a delay while production costs are lower in China versus the U.S.”

Tesla shares rose as much as 1.9% before the start of regular trading Friday after plunging 5.3% on Thursday. The stock has dropped 35% from its peak in late January.

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