While Elon Musk now owns Twitter, his other business seems to have taken a hit. Shares of Tesla (NASDAQ: TSLA) were in the midst of a freefall on Tuesday. It seems investors have been selling off Tesla for one reason or another. While the Twitter buyout might have played a role in this, another explanation for Tesla’s dip is something a bit more tangible.
The Indian government reported that it prefers Tesla to produce cars within the country domestically rather than exporting them to India from its existing China factory. India transport minister Nitin Gadkari said that Tesla could not import cars it makes from China. “Making in China and selling here is not a good proposition,” he said, according to a Reuters report.
The news comes as a bit of a setback, as Tesla’s current plan was to do exactly that, ship cars made from China over to India. Setting up another major factory in India would be a massive expense, and it would be much simpler just to export them over. However, despite Tesla’s long-standing lobbying efforts, the Indian government has held firm to its tariffs.
Just like China, India represents a massive potential market for electric vehicles given its billion-plus population, although as a market, it’s still secondary compared to China’s ravenous EV enthusiasm. Elon Musk has said India’s tariffs are among the highest in the world, partially due to Prime Minister Modi’s mindset of encouraging more Indian-based manufacturing.
In other Tesla news, the Chinese government added that it wouldn’t try to use its leverage over Tesla to influence content and policies on Twitter following its acquisition by Musk. However, that hasn’t stopped some from speculating that the CCP could still influence Musk or pressure him in some way.
Shares of Tesla were down over 12.5% on Tuesday following the news from India. But besides that, it’s also likely that Tesla shareholders are a bit wary of Musk’s willingness to spend so much money so quickly, seemingly on a dime. Tesla stock has already plummeted over 25% since Musk’s interest in Twitter was first announced.
Even if Musk is able to run Twitter in a way that’s profitable and worth paying tens of billions for, running the social media company will cost him the time and attention that he could have been putting towards Tesla, something that likely some shareholders are starting to realize. Time will tell how everything turns out, but despite posting a record quarter, Tesla stock hasn’t seemed to fare that well for it.
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, Model 3 in 2017, and Model Y in 2020. Global deliveries in 2019 were 367,656 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News