Elon Musk tells China that Tesla will not share data

Text size

News that

Tesla

perhaps a Chinese problem on Friday caused the stock to rise slightly.

After all, China matters a lot to every manufacturer of electric vehicles, and Tesla is the most valuable manufacturer of all. CEO Elon Musk has now discussed the issue. And he does not seem too worried.

On Friday, The Wall Street Journal reported that the Chinese government may stop driving Tesla vehicles (type: TSLA) due to concerns about national security. The timing coincided with the U.S.-China talks in Alaska that shifted to a controversial back and forth about human rights and democracy.

Tesla shares fell early Friday, but rose about 0.3% that day as the

Nasdaq Compound

0.8% and the

S&P 500

dropped a little.

Reuters reported on Saturday that Musk told Chinese listeners that his company has a very strong incentive to be very careful with the information collected by the company or by sensors and cameras on its cars.

“If Tesla used cars to spy in China or anywhere else, we would be shut down,” Musk told Reuters.

To the stock, the issue with the Chinese government seems small, but investors should follow it, as China is critical to the company’s success. China is the largest market for new cars and new cars. Wedbush analyst Dan Ives calls China the core of future growth for the company. He rates Tesla shares as a Hold’s and has a price target of $ 950 for shares.

‘At a time of some tension between the US and China, Musk & Co. found. their in a unique position – together with

appeal

“To be caught in the crossfire,” Ives wrote in a report on Friday. He added that although he did not expect the situation to get out of control, he kept a close eye on developments.

Tesla shares have fallen over the past few weeks, but not due to geopolitical tensions.

Higher interest rates hurt Tesla shares. High rates hurt high growth stocks like Tesla more than others. To begin with, higher interest rates make it more expensive to finance growth. Second, high-growth companies will generate the bulk of their cash flow far into the future. Higher rates make the promise of future cash, relatively speaking, a little less attractive than the higher yields from bonds at present.

Tesla shares have fallen about 7% so far, lagging behind the comparable returns of the S&P 500 and

Dow Jones Industrial Average.

Shares are about 27% lower than their 52-week high in January. The yield on the 10-year treasury note has recently risen by 1.7%, over the past few weeks by about 0.5%.

Write to Al Root at [email protected]