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Tesla (TSLA) plans to open an electric-car manufacturing unit in southern India. The automaker seeks to be among the first to tap into the nascent EV market. Tesla shares fell.
Meanwhile, the U.S.-based electric-vehicle maker is said to be close to an agreement to locate its plant in Karnataka. Its capital Bangalore is known as a tech hub. Plans include an R&D center and possibly an assembly plant.
Additionally, Tesla has often talked about launching operations in India over the past few years. CEO Elon Musk tweeted in December that Tesla would launch in India in 2021. But that's years after it began taking reservations for the Model 3 in India.
In January, the EV maker incorporated Tesla Motors India and Energy Private Limited with its registered office in Bangalore.
Wedbush analyst Daniel Ives says India represents a key strategic market for Tesla and could account for 5%-plus of its global sales by 2026. Ives admits there are "a number of logistical and ramp-up issues." EVs represent less than 1% of vehicles in India. Also, EV technology and infrastructure are emergent at best.
Still, Ives said in a recent note to clients that India "has significant pent-up demand for EVs and represents a major potential growth area for Tesla over the coming years." He added that "showrooms, supercharger networks, and other build-outs (R&D centers) (are) expected over the next 18 to 24 months."
Tesla is expanding its Shanghai facility, and expects to have an R&D center there up and running by year-end. The EV giant also is constructing plants outside Berlin and Austin.
Ives says he expects Tesla to exceed 1 million deliveries globally in 2022. Tesla could approach 5 million deliveries annually by the end of the decade if demand continues at this pace, he adds. And while EVs make up just 3% of sales today, he sees that figure growing to 5% by the end of 2021 and to 10% by 2025.
"Now is the time to make this strategic first mover advantage move by Tesla around the nascent India market," Ives said.
Tesla Stock
Shares fell 2.4% to close at 796.22 on the stock market today, pulling back from the 21-day exponential moving average. Tesla stock is nearing a test of its 10-week moving average, which would be the first since mid-November. A rebound from the 10-week line could offer an entry or add-on buy point, though investors might want to see if TSLA stock can retake its 21-day line. Shares are working on a flat base, but need more time for that to develop.
Tesla stock had a breakout attempt over a high-tight-flag pattern on Jan. 25, but it didn't get very far. Instead, it resulted in a sell signal when the stock fell 7%-8% a few days later, according to MarketSmith chart analysis.
Tesla stock flashed several signals of a climax top in early January. However, the IBD Leaderboard stock has proved to be resilient.
The stock has an RS Rating of 97 and and EPS Rating of 74. Its relative strength line has been trending lower as the stock has taken a breather in the last few weeks, following a record-breaking year.
Among other EV makers, Nio (NIO) fell 1%. Xpeng (XPEV) dropped 4%. Meanwhile, among U.S. automakers making a big push in the EV space General Motors (GM) dipped 0.3% and Ford (F) edged up 0.8%.
Tesla Eyes India, China For Growth
India has sought to reduce its oil dependence and control pollution. But the rollout of electric vehicles has been delayed by a lack of investment in infrastructure such as charging stations. However, Reuters reported that India plans to offer $4.6 billion in incentives to companies that set up advanced battery manufacturing facilities there.
Luxury cars are a relatively small share of India's auto sales, with bad roads a significant issue.
The growing pains of going into a new market like India are worth it to Tesla, says CFRA Research senior analyst Garrett Nelson.
"Both India and China have populations that are over four times the size of the United States, and if the company is going to meet its long-term goal of growing annual volumes by 40x over the next decade, it will likely need to establish a foothold in these countries, as the North American and European automobile markets are highly mature," he told IBD.
Nelson said also that while the EV market is practically nonexistent in India and the country lags many others in EV infrastructure, he thinks "Musk realizes that operating costs are relatively low there and also views the country as low-hanging fruit from an environmental perspective."
SOURCE: INVESTORS BUSINESS DAILY
Meanwhile, the U.S.-based electric-vehicle maker is said to be close to an agreement to locate its plant in Karnataka. Its capital Bangalore is known as a tech hub. Plans include an R&D center and possibly an assembly plant.
Additionally, Tesla has often talked about launching operations in India over the past few years. CEO Elon Musk tweeted in December that Tesla would launch in India in 2021. But that's years after it began taking reservations for the Model 3 in India.
In January, the EV maker incorporated Tesla Motors India and Energy Private Limited with its registered office in Bangalore.
Wedbush analyst Daniel Ives says India represents a key strategic market for Tesla and could account for 5%-plus of its global sales by 2026. Ives admits there are "a number of logistical and ramp-up issues." EVs represent less than 1% of vehicles in India. Also, EV technology and infrastructure are emergent at best.
Still, Ives said in a recent note to clients that India "has significant pent-up demand for EVs and represents a major potential growth area for Tesla over the coming years." He added that "showrooms, supercharger networks, and other build-outs (R&D centers) (are) expected over the next 18 to 24 months."
Tesla is expanding its Shanghai facility, and expects to have an R&D center there up and running by year-end. The EV giant also is constructing plants outside Berlin and Austin.
Ives says he expects Tesla to exceed 1 million deliveries globally in 2022. Tesla could approach 5 million deliveries annually by the end of the decade if demand continues at this pace, he adds. And while EVs make up just 3% of sales today, he sees that figure growing to 5% by the end of 2021 and to 10% by 2025.
"Now is the time to make this strategic first mover advantage move by Tesla around the nascent India market," Ives said.
Tesla Stock
Shares fell 2.4% to close at 796.22 on the stock market today, pulling back from the 21-day exponential moving average. Tesla stock is nearing a test of its 10-week moving average, which would be the first since mid-November. A rebound from the 10-week line could offer an entry or add-on buy point, though investors might want to see if TSLA stock can retake its 21-day line. Shares are working on a flat base, but need more time for that to develop.
Tesla stock had a breakout attempt over a high-tight-flag pattern on Jan. 25, but it didn't get very far. Instead, it resulted in a sell signal when the stock fell 7%-8% a few days later, according to MarketSmith chart analysis.
Tesla stock flashed several signals of a climax top in early January. However, the IBD Leaderboard stock has proved to be resilient.
The stock has an RS Rating of 97 and and EPS Rating of 74. Its relative strength line has been trending lower as the stock has taken a breather in the last few weeks, following a record-breaking year.
Among other EV makers, Nio (NIO) fell 1%. Xpeng (XPEV) dropped 4%. Meanwhile, among U.S. automakers making a big push in the EV space General Motors (GM) dipped 0.3% and Ford (F) edged up 0.8%.
Tesla Eyes India, China For Growth
India has sought to reduce its oil dependence and control pollution. But the rollout of electric vehicles has been delayed by a lack of investment in infrastructure such as charging stations. However, Reuters reported that India plans to offer $4.6 billion in incentives to companies that set up advanced battery manufacturing facilities there.
Luxury cars are a relatively small share of India's auto sales, with bad roads a significant issue.
The growing pains of going into a new market like India are worth it to Tesla, says CFRA Research senior analyst Garrett Nelson.
"Both India and China have populations that are over four times the size of the United States, and if the company is going to meet its long-term goal of growing annual volumes by 40x over the next decade, it will likely need to establish a foothold in these countries, as the North American and European automobile markets are highly mature," he told IBD.
Nelson said also that while the EV market is practically nonexistent in India and the country lags many others in EV infrastructure, he thinks "Musk realizes that operating costs are relatively low there and also views the country as low-hanging fruit from an environmental perspective."
SOURCE: INVESTORS BUSINESS DAILY
