Tesla Stock Surges On China Subsidies

Tesla stockBlomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) shares hit a new all-time high today of more than $197 a share as investors pondered what the future may hold for the automaker. Benzinga writer Jayson Derrick reports (via NASDAQ) that the Chinese Finance Ministry will be extending a subsidy program for those who wish to buy electric vehicles. Investors are undoubtedly seeing dollar (or in this case, yuan) signs in Tesla’s future.

Tesla looks to expand in China

Tesla Motors Inc (NASDAQ:TSLA) management has said that China is an important market, and it becomes even more important now. The subsidy program for electric vehicle purchases had been scheduled to run out in 2015, but now the government has extended it with the goal of having 500,000 hybrid or EVs on Chinese roads next year and five million by 2020.

The automaker has been taking preorders for its vehicles in China since last August and will begin delivering vehicles in China this month or next.

Tesla reports positive feedback from China

Bloomberg Businessweek reports that Baird analyst Ben Kallo spoke with Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk and Chief Technical Officer JB Straubel. Both said they received positive feedback from customers in both Europe and China. Musk has said that shipments to China could easily reach the same number as U.S. shipments by next year. He also said they will likely end up building a facility in China at some point.

TheStreet founder Jim Cramer said even though Tesla Motors Inc (NASDAQ:TSLA) isn’t ready to “mass produce Chinese cars, it just doesn’t matter.” He said this thesis “is simply too positive NOT to buy Tesla.” “Next thing you know the stock takes out its high and you have a technical reason to own Tesla,” Cramer added.

Interestingly enough, TheStreet Ratings Team holds quite the opposite view of its founder. It has a Sell rating with a D score on Tesla Motors Inc (NASDAQ:TSLA).



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Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.