In a significant development, Tesla Chief Executive Elon Musk paid a visit to Beijing, China, on Tuesday, marking his first trip to the country since 2020. During his visit, Musk met with China’s foreign minister, Qin Gang, and conveyed Tesla’s willingness to expand its business operations in China.
The Chinese foreign ministry assured Musk of their commitment to providing a favorable business environment based on market principles, the rule of law, and internationalization.
Following this positive development, Tesla, Inc. (NASDAQ: TSLA) witnessed a surge in its stock on Tuesday, building upon the momentum gained last week. The stock saw a 4.14% increase, reaching 201.16 during market trade. This upward movement indicates the stock’s potential to surpass key levels. In the previous week, TSLA experienced a substantial 4.7% jump, with the stock price reaching $193.17.
Musk’s visit to Beijing is significant as it marks his first trip to China since the early months of 2020, prior to the Covid pandemic. The trip comes at a time when the electric vehicle competition in China is intensifying, leading to uncertainties surrounding Tesla’s demand. It is noteworthy that Tesla has not yet provided any updates regarding its plans to increase production at its Shanghai plant by 450,000 (450K) vehicles per year. However, Tesla executives mentioned in April that they have plans to construct a Megapack factory in Shanghai, focusing on the production of energy storage products.
Recent reports suggest that Tesla Shanghai has reduced its Model 3 production, potentially in preparation for an upgraded version of the vehicle. In parallel, Tesla Canada started offering discounts on Model 3 inventory shortly after Shanghai began exporting vehicles to Canada, replacing previous exports from the United States.
Tesla’s sales in China have shown positive growth, with 12,800 units sold last week, an increase from 10,200 units the previous week, according to sources cited by CnEVpost. The number of deliveries in the first two weeks of May stood at 5,928 and 9,990, respectively. This rise in registrations may indicate stronger demand or increased local supply with Shanghai’s Q2 exports largely over. In total, Tesla has sold 38,918 vehicles manufactured in China throughout the month.
Notably, in May 2022, Tesla Shanghai manufactured 33,544 vehicles, of which 22,340 were exported.