Following a tumultuous 2022, electric vehicle (EV) behemoth Tesla (NASDAQ: TSLA) has experienced a remarkable resurgence in 2023.
Fueled by improved macroeconomic conditions and a resurgent tech market, the company’s shares soared to triple-digit gains, briefly touching nearly $300 in July.
A minor pullback followed a less-than-stellar earnings report in late October, which showed that the carmaker’s price cuts ate into its profitability. At press time, TSLA was sitting at $261.44, up 1.88% in the past 24 hours.
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However, a fresh surge of anticipation gripped investors on December 28, as reports surfaced indicating Tesla’s selection of a site for its next production plant, potentially adding a new dimension to the company’s upward trajectory.
Tesla to officially announce its next plant in January
As first reported by Ahmedabad Mirror, Tesla is set to establish a car manufacturing plant in Gujarat, a major Indian state.
The official announcement of this plan is expected to be made during the upcoming Vibrant Gujarat Summit in January 2024, which Tesla CEO Elon Musk is expected to attend, the report said.
Gujarat, the fifth-largest Indian state by area, is seen as a favorable business environment for Tesla’s manufacturing efforts. The government offered three Gujarat-based cities for Tesla to build its plant, including Sanand, Becharaji, and Dholera.
Ahmedabad Mirror’s sources noted that Gujarat bodes well for Tesla’s export-oriented strategy, catering to both domestic and international demand.
The EV Giant does not import its vehicles directly into India due to the country’s high tariffs. The government had said there is no proposal to offer a subsidy on the import duty for EV imports into the country.
What does this mean for Tesla stock?
The announcement of Tesla’s manufacturing plant in Gujarat was welcomed by investors, with the company’s stock rising more than 1.2% in premarket trading.
Business developments and expansion plans such as this one typically incite positive investor reactions, however, the stock’s long-term trajectory depends on larger determinants such as the company’s fundamentals.
Tesla’s Q3 2023 report showed that the automaker’s operating margin fell significantly from a year ago, mainly due to the series of price cuts the company unveiled this year to spur demand.
Therefore, investors are likely to await improvements in fundamentals and noteworthy progress in the company’s self-driving and robotaxis initiatives before staging a sustained bull run for the stock.
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