Tesla, despite being a growing company with plenty of potential, has had a rough time on the stock market this year. While the NASDAQ composite has grown 7.87% year to date, Tesla stock (TSLA) has fallen -9.18%.
Investors have been disappointed by profit forecasts and reports that Tesla will lay off up to 7% of its workforce in the next year. However, recently announced news could bring back some of the confidence that the stock enjoyed in 2018.
Tesla Expands Model 3 Market into the European Union
Tesla’s most popular and most affordable car, the Model 3, has now been approved for sale in the European Union. This opens a lucrative market, and it has been reported that a shipment of 1,000 vehicles has already left the United States. Sales of Model 3 cars in Europe are expected to begin in February.
Europe is an important market for Tesla, so the approval of the Model 3 is a significant milestone. The Model S is already sold throughout Europe and is the 6th best-selling electric car in the region. With the introduction of the Model 3, Tesla will become even more competitive.
Currently, the Nissan Leaf is the highest selling electric vehicle in Europe. More than 33,000 were registered in the EU during 2018. It´s sold over 12,500 Model S cars in the same year. The company is banking on the Model 3 to erode and even challenge the leadership of the Nissan Leaf.
Tesla’s Chinese Expansion is Underway
While Europe will be a key market for Tesla, China is likely to be its largest. Tesla broke ground on a Chinese factory this month and is now in talks with Tianjin Lishen to supply batteries for its local cars. Lishen is not yet a global name, but it is well known in Chinese industry for its advanced battery cell products. A local battery partner could help to speed it’s growth in China.
Tesla’s focus on both the EU and China will put it in a strong position in the coming years.
Tesla Expansion is Good News for Investors
Despite negative sentiments early this year, Tesla’s continued push for expansion is a positive for investors. Even with limited resources,it has managed to grab the headlines and attract consumer interest, while the big auto manufacturers have been caught sleeping.
Tesla will have a lot of growing pains in the coming years. But, its investments show a sound long-term strategy that could make it one of the most important auto companies of the electric vehicle era.
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