Tesla Motors Inc (TSLA) Shares Plunge Owing To China Factor

Tesla Motor (TSLA)

Just as Elon Musk, CEO of Tesla Motors Inc (NASDAQ:TSLA) announced on Tuesday, 13th January, 2015, that sales numbers coming in from China indicated a downward trend for the last quarter of 2014, share value of the stock immediately began to plunge. The occasion being Detroit Auto Show, Elon Musk did not waste any time in dispensing with this bad news which caused Tesla shares to end up 6% lower and poised at $192 at the end of trading session.

What was surprising was that the decline occurred in spite of Tesla Motors Inc (NASDAQ:TSLA) having established a prominent presence in the Asian country courtesy of operating nine stores spread across six cities and a tie-up with local company to facilitate charging. According to Musk, sales took a beating due to the common perception that the 700 charging points provided across 70 cities throughout China may not be enough, especially for long distance drives.

Tesla Motor (TSLA)

Although the super-charger network in China is not as vast and expansive as the circuits in Europe and USA, it is undergoing gradual expansion. As reported on CNBC, the CEO is not very concerned about the dismal figures that have arrived from China since he considers the Chinese market to account for a small percentage of total sales. With USA and Europe serving as principle markets, Elon Musk has his eyes on the long-term growth potential for Tesla Motors Inc (NASDAQ:TSLA).

The fact that Model S was fortified with a new feature after one of Elon Musk’s five children pointed out the deficiency is proof enough of how seriously he takes the company as also its products. That said, as the CEO of Tesla Motors Inc (NASDAQ:TSLA), he also pointed out that profits from this venture could only be realized by 2020 and therefore, people should lower their expectations.

This article has been written by Vinita Basu.

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