Recent reports on Tesla’s plans to produce its highly-awaited €25,000 model offering in Germany to target the European market reportedly caused the shares of Chinese electric automakers’ in the stock market to decline, according to Bloomberg.
The imminent arrival of the mass-market Tesla electric car will significantly elevate the ongoing competition in the European market.
Report highlights
Tesla will soon produce its new €25,000 ($26,838) model at Giga Berlin, Reuters reported on Monday, citing a person with knowledge of the matter.
Tesla Chief Elon Musk apparently announced the local production plans with the factory workers during his recent visit to the Giga Berlin last Friday.
It is also worth noting that previous remarks from the Tesla boss hinted at the potential production of the low-cost model in Giga Mexico, and India.
Tesla has yet to determine and announce the official launch date of the highly awaited €25,000 electric car.
Impact on Chinese rivals
Chinese automaker Nio reportedly suffered more than a 5% decline in its Hong Kong-listed shares on Tuesday. It marked the highest share drop compared to its other co-Chinese brands.
“Europe has been a question mark for Chinese EV makers because of the ongoing probe. Xpeng and BYD continue to ramp up well in Europe, but Nio has its own issues. Its deliveries are much weaker than its Chinese peers.”
Vey-Sern Ling, Union Bancaire Privee Managing Director
XPeng also had a share drop of over 3%, while Chinese NEV leader BYD edged lower.
“The Tesla news could weigh on investor sentiment for its Chinese competitors, and Nio — with its weak financials and productions — could be more vulnerable to selling pressure.”
Andy Wong, LW Asset Management Advisors Ltd. Fund Manager
Tesla’s EU-made €25,000 model can significantly boost its competitive advantage against the Chinese automakers that have been dominating the European market with their cheap offerings. It can potentially tap into the mass market segment, enabling Tesla to expand its customer base.
Supplier information previously disclosed Tesla’s plans to produce 4 million units of the low-cost model by 2030 to support its target of delivering 20 million EVs by the same year, CarScoops reported.
