Pierre Ferragu, managing partner of New Street Research, shares his expectations for Tesla’s production and inventory in the coming years.
According to new reports, China has banned the country’s military members and employees of government enterprises from purchasing Tesla vehicles.
The ban comes amid heightened tensions between the US and China and the security problems associated with technological products the two countries buy and sell to each other.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| TSLA | TESLA, INC. | 654.87 | +1.71 | + 0.26% |
Chinese officials are concerned about possible data collection through camera technology in Tesla vehicles that could lead to a review of national intelligence leaks, people familiar with the matter told The Wall Street Journal.
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‘China conducted a safety review of Tesla’s EVs and reportedly found that Tesla’s sensors could take pictures [sic] analysts at Wedbush Securities, according to Dan Ives and Strecker Backe.
Shanghai, China – August 1, 2020: Exterior view of the Tesla Gigafactory 3 car factory in Pudong District, Shanghai, China.
They said that although China’s findings were “in line with Tesla’s footsteps … fears about location monitoring and surveillance, as Tesla is a US company, clearly raised some fears in the Chinese government and military. which led to this action outside the left field. “
After China’s permission to build a factory in 2018, the Shanghai Gigafactory started at the end of 2019. The factory increased Tesla’s production in China by more than 20%, which helped the company reduce manufacturing costs. Unlike other businesses in the country that have to operate Chinese partners, Tesla is the sole owner and manager of the plant.
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The Chinese Communist Party reportedly asked the country’s army and certain agencies to tell their members and employees not to buy Teslas, the Journal reported, citing those familiar with the move.
According to Ives and Backe, demand for Tesla’s electric vehicles is skyrocketing, and the move by China could be a sign of authority.
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“Tesla’s massive Giga footprint remains an important strategic advantage over other EV players (domestic and foreign), as we believe Tesla has the potential to create a [300,000] current demand rate in China by the second half of this year, ‘the analysts wrote.
The US has similarly cracked down on Chinese technology, such as Huawei and TikTok parent company ByteDance, over the past few years in terms of surveillance and security.