Tesla (TSLA) stock traded higher at the time of writing. The increase can be attributed to the company’s efforts to boost its presence in China by launching a new six-seater variant of its popular Model Y SUV. According to Reuters, production of this new model is expected to begin at TSLA’s Shanghai Gigafactory in late 2025.
In line with this, Tesla has requested its suppliers to prepare for a double-digit increase in Model Y production in China. However, these plans depend on government approval for a 70-hectare (172-acre) expansion of the Shanghai factory.
Tesla Responds to China’s Growing Demand
The introduction of this new variant is in response to the growing demand for family-friendly vehicles in China. This move reflects Tesla’s commitment to the Chinese market, which accounts for about over 20% of TSLA’s overall sales.
It is worth mentioning that Tesla’s expansion plans come amid intense competition from other Chinese automakers, as rivals like Nio (NIO) and Zeekr (ZK) introduced similar variants earlier in 2024.
Nevertheless, Tesla’s sales in China continued to climb in August, bolstered by ongoing incentives for local buyers and enhanced government support. Looking ahead, the company expects sales growth in the third quarter.
Is Tesla a Buy, Sell, or Hold?
Analysts remain sidelined on TSLA stock. On TipRanks, it has a Hold consensus rating based on 10 Buys, 14 Holds, and seven Sells assigned in the past three months.
The analysts’ average price target on Tesla stock of $211.46 implies 1.24% downside potential. Shares of the company have gained 21.45% in the past three months.
