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China May Be The Future, But Tesla's Future There Is Uncertain

Apr. 08, 2021 2:57 PM ETTesla, Inc. (TSLA)554 Comments
John Engle profile picture
John Engle


  • Having broken ground in Jan. 2019, Tesla's Shanghai factory began deliveries before the end of that year; the Model 3 enjoyed immediate success, quickly becoming China's top- selling EV.
  • Domestic and international competitors have begun to flood the Chinese EV market, threatening to erode Tesla's market share or even overtake it, as has already occurred in Europe.
  • Tesla's factory contract with the Chinese government further complicates matters since, in exchange for subsidies and privileges, Tesla has essentially put itself at the mercy of the Chinese state.
  • Should Beijing seek to pressure Tesla, it may struggle to resist, as evidenced by (among other things) Elon Musk's remarkable obsequiousness toward Chinese officials.
  • As a small-scale manufacturer with an outsized valuation and public image, Tesla may be especially vulnerable to threats created by escalating tension in the Sino-American relationship.
Tesla Gigafactory 3, Shanghai
Photo by Sky_Blue/iStock Unreleased via Getty Images

Tesla Inc. (NASDAQ:TSLA) made its first big move into China in July 2018, when it announced that it had signed a deal to build a new “Gigafactory” in Shanghai and that it intended to build it in

This article was written by

John Engle profile picture
Investment professional specializing in deep value opportunities, growth plays, special situations (long + short) across a range of asset classes and industries.Current Role(s): President, Almington Capital Merchant Bankers; Chief Investment Officer, The Cannabis Capital Group.Asset Classes: publicly traded securities (stocks + fixed income), private equity, real estate, venture capital, cannabis, fintech.https://subscriptions.seekingalpha.com/lp_premium_beat_the_market_4/?source=affiliate:42612986Education: MA, Trinity College Dublin (economics + philosophy); Diploma (finance), London School of Economics & Political Science; MBA, University of Oxford.

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