Morgan Stanley analyst Adam Jonas has cautioned that investors should lower their expectations about Tesla’s profits in China, Bloomberg reported Wednesday.
Jonas reasoned that Chinese ports suspended customs clearance of 1,600 Model 3 units due to labeling problems. He also listed Tesla’s reliance on China having “constructive trade relations” with the United States, American export regulations, and potential tech-transfer woes as causes for concern.
His pessimism on Tesla contrasted with New-York based equity research firm JL Warren, which revealed late last month that the US-based EV maker received support from four Chinese banks in its pursuit of a US$2 billion loan to fund construction of its Shanghai plant.
Tesla CEO Elon Musk has high hopes that this plant in China could help the company boost its production capacity, which is imperative for profits.
During the company’s latest earnings call in January, Musk described the Shanghai plant as a key step for manufacturing 500,000-plus vehicles per year.
Tesla has just slashed prices to woo buyers around the world.