EV giant Tesla’s stock price rallied on a potential positive development in its plans to enter India.
- Tesla (Nasdaq: TSLA) shares closed 2.7% higher on Monday (30 August)
- The electric carmaker is reportedly in discussions with Indian auto parts suppliers
- Elon Musk, Tesla's CEO, has signalled concerns over Nvidia’s planned Arm purchase
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Tesla shares rev up on news of talks in India
Shares of the world’s biggest electric-vehicle (EV) maker Tesla surged 2.7% day-on-day to close at US$730.91 on Monday. Volume traded was about 18.6 million shares.
The price gains came despite GLJ Research analysts saying that Tesla was likely to miss its local China vehicle sales estimates.
Instead, stoking investor sentiment was a news report that the Nasdaq-listed company is currently seeking auto parts suppliers in India ahead of its entry into the country, one of the world’s biggest emerging car markets.
Out of 45 analysts, 22 recommended ‘buy’ on TSLA shares, 14 gave ‘hold’ calls, and nine suggested ‘sell’. Their average target price was US$679.97, Bloomberg data showed.
Last week, Cowen’s research team gave a ‘market perform’ call with a US$562 target price, DZ Bank recommended ‘buy’ with a US$790 target, while Morgan Stanley rated TSLA ‘overweight/in-line’ alongside a US$900 target.
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Tesla’s potential foray into India: What’s the latest?
On Monday, shares of Indian auto parts suppliers jumped as much as 13.7%. That came after The Economic Times newspaper reported on Sunday that Tesla was in early discussions with at least three local companies to source critical electrical, electronic, and mechanical components, as part of its plans to enter the South Asian country.
The California-based EV pioneer is in talks with the firms for the supply of parts such as instrument panels, windshields, brakes and power seats, the report added.
Indian companies already supplying components to Tesla were said to include Bharat Forge Ltd, Sona BLW Precision Forgings Ltd, and Sandhar Technologies Ltd.
Tesla intends to set up a factory to produce cars in India if it can first begin sales with imported vehicles. Its CEO Elon Musk has said several times on Twitter about the US company’s impending entry into India.
Reuters reported that Tesla registered a local company this January, and by April it had begun looking for locations to open showrooms in New Delhi, Mumbai and Bengaluru.
Elon Musk said to oppose Nvidia deal for UK chip maker
Separately, Musk has indicated competition concerns over US semiconductor giant Nvidia Corp’s planned takeover of British chip designer Arm Ltd, The Telegraph reported on Saturday, citing multiple sources.
The UK newspaper also said e-commerce behemoth Amazon.com Inc and South Korean smartphone maker Samsung Electronics Co Ltd have lodged opposition to the deal with US authorities.
Nvidia is likely to seek European Union antitrust approval for the acquisition in early September, Reuters said.