Tesla Will Build Its 1st Factory Outside U.S. In Shanghai

Tesla, Inc. TSLA inked a deal to build its first factory outside the United States, per Associated Press. With this factory in Shanghai, this electric vehicle (EV) manufacturer will be the first wholly-owned foreign automaker in China. The deal was announced after Tesla raised prices of Model X and Model S vehicles by 20% in China. The automaker resorted to this move as the U.S.-China trade war started to affect auto companies. Also, the promise made by Chinese authorities in April to end restrictions, which required foreign automakers to tie up with local partners, might have prompted the automaker to take such a decision.

Importantly, China is the world’s biggest EV market. But, Tesla and many other automakers were unwilling to shift manufacturing facilities to this country because of the restriction to share technology with local partners. For Tesla, China is the second largest market after the United States.

Tesla added that the construction for the new factory would start only after the obtainment of the necessary official permits. No details of the deal have been provided. However, this may turn out to be the biggest foreign investment in Shanghai.

In the past three months, shares of Tesla have outperformed the industry it belongs to. Its stock has returned 9.6% in comparison with the industry’s increase of 2.1%.

Tesla currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are American Axle & Manufacturing Holdings, Inc. AXL, Magna International Inc. MGA and Fox Factory Holding Corp. FOXF, each carrying a Zacks Rank #2 (Buy). You can see

the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American Axle & Manufacturing has an expected long-term growth rate of 8.1%. Over the past year, shares of the company have gained 3.5%.

Magna has an expected long-term growth rate of 8.5%. Over the past year, shares of the company have gained 27.5%.

Fox Factory has an expected long-term growth rate of 12.5%. Shares of the company have risen 45.7% over the past year.

More Stock News: This Is Bigger Than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>


View photos

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Tesla, Inc. (TSLA) : Free Stock Analysis Report


Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report


American Axle & Manufacturing Holdings, Inc. (AXL) : Free Stock Analysis Report


Magna International Inc. (MGA) : Free Stock Analysis Report


To read this article on Zacks.com click here.


Zacks Investment Research

Source : https://finance.yahoo.com/news/tesla-inks-deal-build-factory-121912910.html

Tesla Inks Deal to Build Factory in Shanghai, 1st Outside US
Tesla will build its 1st factory outside U.S. in Shanghai
Tesla will tap local debt to fund $2 billion Shanghai Gigafactory: Musk
Tesla plans to raise funds for its China factory: Bloomberg
Nio, China's Tesla, Will Be First Chinese Automaker With U.S. IPO
Tesla Plans to Fund New Chinese Car Factory With Local Debt
China's 'Tesla-fighter' plans to go public in New York
5 things to know about Tesla’s China plans
[LIMITED STOCK!] Related eBay Products