Tesla, Inc. (TSLA - Free Report) has made the announcement of inking a deal with lenders in China to obtain 12-month facility of up to 3.5 billion yuan ($521 million) for its Gigafactory in Shanghai, per Reuters. Lenders in the deal include China Construction Bank Corp., Agricultural Bank of China Ltd., Industrial and Commercial Bank of China, and Shanghai Pudong Development Bank Co. This credit facility will place this electric vehicle (“EV”) maker a step closer to the production of its flagship Model 3 sedan at its first overseas facility.
After prolonged negotiations with the China authorities, Tesla got the nod to own the first wholly-owned foreign manufacturing facility in the country and broke ground on the Shanghai factory in January 2019. The Gigafactory will cost approximately $2 billion and it is likely to be completed in May 2019.
A wholly-owned manufacturing factory will be hugely beneficial for the company. This will aid it in lowering the impact of the U.S.-China trade spat. Moreover, this will help the company to compete with a fleet of EV startups.
In the past year, shares of Tesla have underperformed the industry it belongs to. Over this time frame, the stock has lost 24.2% while the industry declined 3.1%.
Tesla currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the auto space are Ferrari N.V. (RACE - Free Report) , Oshkosh Corp. (OSK - Free Report) and General Motors Company (GM - Free Report) . While Ferrari currently sports a Zacks Rank #1 (Strong Buy), Oshkosh and General Motors carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ferrari has an expected long-term growth rate of 18.5%. Over the past year, shares of the company have risen 2.8%.
Oshkosh has an expected long-term growth rate of 11.3%. Over the past six months, shares of the company have surged 11%.
General Motors has an expected long-term growth rate of 8.5%. Over the past three months, shares of the company have risen 10.5%.
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