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Tesla (TSLA) Gearing Up for Vehicle Production in China

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Per a Bloomberg report, Tesla, Inc. (TSLA - Free Report) is close to begin vehicle production in China. The Palo Alto, CA-based electric vehicles maker is about to enter into an agreement with the city of Shanghai. The agreement will allow the company to build facilities in Lingang development zone and access the Mainland market more vehemently.

Tesla is actively undertaking international expansion. Since 2013, the company has started selling its vehicles in a number of new markets such as Europe, China, Japan, Hong Kong, Australia, and Mexico. In fact, in 2016, Tesla’s revenue grew three times to over $1 billion. Moreover, though production in China, the largest auto market in the world, the company can avoid 25% import tariff.

The Chinese government has figured out new-energy vehicles as an important emerging industry. The country aims at raising the annual sales of plug-in hybrids and fully electric cars 10-fold in the coming decade. Given these huge opportunities, Tesla’s China odyssey seems logical.

Tesla has outperformed the Zacks categorized Automotive - Domestic industry in the last three months. The company’s share price has increased 46%, while the industry has gained 8.5%.



Currently, Tesla carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the auto space include Fox Factory Holding Corp (FOXF - Free Report) , General Motors Company (GM - Free Report) and Dana Incorporated (DAN - Free Report) , each sporting a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Expected long-term growth rate for Fox Factory Holding, General Motors and Dana are 15.6%, 9.2% and 3%, respectively.

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