Tesla shares close lower on Friday, China gives auto maker the green light to start producing in the country

According to a statement by China’s Ministry of Industry and Information Technology last week, Tesla Inc (TSLA) was added to a government list of approved automotive manufacturers. The US electric car maker was granted the required certificate so that it can begin producing in the Asian country.

Tesla shares closed lower for the fourth time in the past fourteen trading sessions on NASDAQ on Friday. It has also been the steepest daily loss since October 3rd. The stock went down 1.92% ($5.02) to $256.95, after touching an intraday low at $255.13, or a price level not seen since October 15th ($254.12).

Shares of Tesla Inc have retreated 22.79% so far in 2019 compared with a 24.31% gain for the benchmark index, Nasdaq 100 (NDX).

In 2018, Tesla’s stock went up 6.89%, thus, it outperformed the Nasdaq 100, which registered a 1.04% loss.

According to Yale Zhang, head of Automotive Foresight based in Shanghai, the decision suggests that ”the green light is fully given to Tesla for production in China.”

Tesla is constructing a $2 billion facility in Shanghai, which is going to be its first vehicle manufacturing site abroad.

The US auto maker plans to achieve a weekly production rate of at least 1 000 Model 3 vehicles at the facility, as it seeks to increase sales in China and to avoid higher tariffs imposed on US-imported cars.

Tesla’s vehicle models were excluded by the Chinese government from a 10% car purchase tax on August 30th.

Analyst stock price forecast and recommendation

According to CNN Money, the 29 analysts, offering 12-month forecasts regarding Tesla Inc’s stock price, have a median target of $245.00, with a high estimate of $530.00 and a low estimate of $140.00. The median estimate represents a 4.65% downside compared to the closing price of $256.95 on October 18th.

The same media also reported that at least 11 out of 33 surveyed investment analysts had rated Tesla Inc’s stock as “Hold”, while 10 – as “Buy”. On the other hand, 9 analysts had recommended selling the stock.