Tesla to build up in China with new design center
Electric carmaker seeks to cement its growing presence in the country
Fresh on the heels of delivering the first cars built at its Shanghai Gigafactory, Tesla is looking to set up a new design and research center in China in order to better serve one of the largest markets for its electric cars.
Tesla China, Tesla’s Chinese business, mentioned the plans on its official WeChat account, saying that the company is looking to hire designers and other workers to build “Chinesestyle” Tesla vehicles. The location of the facility wasn’t disclosed.
According to Reuters, which translated parts of the announcement into English, “CEO Elon Musk has proposed a very cool thing — set up a design and research center in China.”
Tesla didn’t immediately respond to a request for comment about its future plans in China.
It’s no secret as to why Tesla would put more resources into its China-based operations. After the United States, China is Tesla’s second-largest revenue region, with $669 million in sales during the thrid quarter of 2019. When Tesla reported its third- quarter results, the company said it believes China could become the largest market for its Model 3 sedan.
Last week, Musk attended an event in Shanghai to deliver the first Model 3 cars built in China to Tesla customers. The occasion marked a milestone for Tesla, which had only begun construction on its Shanghai Gigafactory in January 2019.
Enthusiasm over Tesla’s opportunities in China has helped fuel a recent surge in Tesla’s stock price, with the company’s shares rising 20% in value since the start of the year, to $502.28 on Thursday.
However, the rise in Tesla’s valuation was tempered some on Thursday when Morgan Stanley analyst Adam Jonas cut his rating on the company’s stock to underweight, or the equivalent of sell, from equal weight, or neutal. Among the reasons Jonas gave for his new opinion was a concern over whether Tesla can succeed over the long term in China due to the economically sensitive nature of the automotive industry.