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Tesla says will start delivering China-made Model 3s to public on Jan. 7

Published 01/02/2020, 07:35 AM
© Reuters. Staff member explains the China-made Tesla Model 3 vehicle at the Shanghai Gigafactory of the U.S. electric car maker in Shanghai
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SHANGHAI (Reuters) - Tesla (NASDAQ:TSLA) Inc will deliver its first China-made Model 3 sedans to the public on Jan. 7 at an event at its Shanghai plant, a representative for the firm told Reuters on Thursday.

The Shanghai plant is part of the Silicon Valley automaker's plans to bolster its presence in the world's biggest auto market and minimize the impact of the U.S.-China trade war.

Fifteen Tesla employees who had purchased the car were the first to take delivery on Monday after the first China-made vehicles rolled off the plant's production line in October.

The deliveries come a year after construction of Tesla's only plant outside the United States began. Production started in October with a target of 250,000 vehicles per year once the Model Y is added to the line up.

"As Model 3s roll off Tesla's Chinese manufacturing facility with local subsidies intact, we believe the U.S.-based focus will need to shift globally for the company," Canaccord Genuity analyst Jed Dorsheimer wrote in a note to clients.

China will be an important market for the company in 2020, said Dorsheimer, who raised his price target on Tesla to $515, the second-highest on Wall Street.

The Model 3 is priced at 355,800 yuan ($50,000) before subsidies. Tesla said previously that it wanted to start deliveries before the Chinese new year beginning Jan. 25.

Tesla's China general manager, Wang Hao, said the company plans to ramp up Model 3 deliveries in January.

Tesla executives also told reporters the plant had achieved a production target of 1,000 units per week, or around 280 cars a day, and that sales for the China-made sedan had so far been "very good".

Hao had said the company will double the number of service centers and fast charging stations in China in 2020.

Shares of Tesla, which is expected to report its fourth-quarter delivery numbers in the next few days, rose 1.1% to $422.88 in premarket trading.

© Reuters. Staff member explains the China-made Tesla Model 3 vehicle at the Shanghai Gigafactory of the U.S. electric car maker in Shanghai

The stock, which touched a record high of $435.31 last week, has had a strong run in recent months on the back of posting a rare profit in the latest quarter and news of China ramp up.

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