Leading Chinese electric vehicle (EV) makers and foreign automakers are flaunting their latest vehicle models at the ongoing 20th auto show in Shanghai. However, Elon Musk-led Tesla (NASDAQ:TSLA) skipped the event this year at a time when competition is growing rapidly in the Chinese EV market.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The Shanghai International Automobile Industry Exhibition was canceled last year due to COVID-19 restrictions. Prior to that, Tesla participated in the 2021 auto show. However, that year, the company received negative publicity when a disgruntled customer climbed atop a Tesla vehicle on display to protest the company’s handling of her complaints about manufacturing brakes. The incident sparked intense criticism for the company, making it issue an apology.
Another reason for Tesla not booking a booth at the Shanghai auto show this year could be the lack of new launches. Tesla has severely lagged its Chinese rivals when it comes to the roll out of new EV models. A recent report by CnEVPost noted that the company commenced the deliveries of its new Model S and Model X in China in March, nine years after the first Tesla car entered the country.
While Tesla skipped the Shanghai auto show, it recently attended the China International Consumer Products Expo in Haikou, South China’s Hainan Province. The company showcased its advanced tech products, including humanoid robot Tesla Bot, at the event.
China Remains a Vital Growth Market
Tesla is facing intense competition from emerging Chinese EV players. For instance, Warren Buffett-backed BYD (BYDDY) has outpaced Tesla in terms of sales volumes in China and offers an extensive range of EVs. Despite the growing competition, declining market share, and the threat from rising U.S.-China tensions, China continues to be a vital market for Tesla. This year, the company slashed its prices in China to spur demand and triggered a price war.
Earlier this month, Tesla announced that it will open a new Megafactory in Shanghai that is capable of producing 10,000 megapacks (high-density battery packs for utilities) per year.
Is Tesla a Good Buy?
Wall Street’s Moderate Buy consensus rating for Tesla stock is based on 18 Buys, 10 Holds, and three Sells. The average price target of $219.37 indicates 17.3% upside. Shares have rallied 52% so far in 2023.
