Tesla (NASDAQ: TSLA) secured another win for itself on Monday. With quarterly sales remaining strong for the automaker at perhaps the most crucial time in the company’s history, Elon Musk can breathe a sigh of relief as Tesla is poised to recover from what was a terrible first quarter.
Monday, the company managed to convince the U.S. Commerce Department to waive tariffs on imported commodities needed to produce battery cells.
According to Reuters, the U.S. government agreed to Tesla’s original request to waive the 10 percent tariffs on important aluminum from Japan. Having first made the request in document form back in April, the automaker asked the government if they could secure an exclusion for 10,000 tonnes of foreign aluminum each year.
On Monday, the Commerce Department responded in a document dated June 5th but recently made public that a reasonable quantity of foreign-produced aluminum could be imported into the U.S. for Tesla.
In their original request, Tesla went on to say that “Tesla is the only US manufacturer of these battery types and planned production of these batteries will increase exponentially over the next few years,” making an appeal to the Trump administration’s desire to grow domestic industries rather than relying on foreign corporations. The automaker added that U.S. manufacturers of aluminum cannot “meet the alloy composition or thickness requirements. Domestic producers also cannot meet the annual volume requirement.”
This announcement is a noteworthy win for Tesla, which previously sought tariff exemptions in the past from the U.S. Trade Representative’s Office for various parts produced in China. Among these include the Model 3 car computer as well as the Autopilot “brain,” both of which were rejected.
Considering the tensions between Beijing and Washington, it’s not surprising that looking to a non-Chinese foreign source, such as in Japan, would have a better chance of being approved by the government.
Tesla’s shares didn’t respond much to the news from the Commerce Department, inching up around 0.8 percent on Monday. Tesla has staged a pretty significant turnaround as just a few months ago many were beginning to wonder if the automaker would fall apart amidst looming cash problems, employee layoffs, sudden executive resignations, and poor sales figures.
In the midst of these worries, Tesla’s stock has fallen from the $387 52-week high to a new low at $176 just earlier this month. Over the course of the past three weeks, shares have gained over 20 percent.
While all of this isn’t enough to assuage the biggest Tesla bears on Wall Street, what is undeniable, however, is that Elon Musk now has some stress taken off his shoulders as his car company is beginning to show results. The question now is whether it will stay this way.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities.
The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, and Model 3 in 2017. Global deliveries in 2018 were 245,506 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News