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Tesla Sparks Concerns With Xinjiang Showroom Opening – Report

Tesla (TSLA) is at risk of damaging its reputation after opening a new dealership in the controversial Xinjiang region in China. The Wall Street Journal (WSJ) reports that the remote region is at the center of forcible assimilation claims targeting religious minorities. TSLA shares jumped 13.53% to close at $1,199.78 on January 3.

Tesla is a U.S. company that designs, manufactures, and sells electric vehicles, solar generation systems, and energy storage products.


According to the WSJ, Xinjiang is a hot spot. Authorities detained have as many as a million Uyghurs and members of other Turkic Muslim minority groups. The assimilation campaign includes mass surveillance, forced labor, and stringent birth controls, which have not gone down well with human rights groups and Western countries.

The claims of human rights violations, however,  did not stop Tesla from opening its first dealership in Urumqi, the capital of Xinjiang. The opening of the dealership is part of the Austin, Texas-based company’s expansion in China, one of its most important markets. 

Tesla has enjoyed a string of big wins in China, despite several western companies facing regulatory pressure and competition. The U.S. electric vehicle giant became the first foreign automaker to build a wholly-owned facility in the country. 

German automaker Volkswagen has also come under pressure recently from lawmakers and human rights activists outside China over its decision to maintain a factory in Urumqi.

Stock Rating

Yesterday, Jefferies analyst Philippe Houchois reiterated a Buy rating on Tesla with a $1,400 price target, implying 16.69% upside potential to current levels. According to the analyst, Tesla ended 2021 on a high, with deliveries exceeding production for the second quarter running.

Consensus among analysts is a Moderate Buy based on 14 Buys, 8 Holds, and 5 Sells. The average Tesla price target of $1,030.08 implies a 13.44% downside potential to current levels.

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