Shanghai: Chinese companies that supply Tesla Inc fell Thursday after Elon Musk indicated his pioneering electric car firm won’t start making vehicles in the world’s largest auto market this decade.
Beijing Zhongke Sanhuan High-Tech Co, which said last year that it signed a three-year agreement to supply parts to Tesla, dropped as much as 3.6 per cent in Shenzhen, while Ningbo Joyson Electronic Corp, which identified Tesla as a customer in its 2016 annual report, slid 3.2 per cent. Fellow suppliers Dongguan Eontec Co and Lens Technology Co both declined more than 4 per cent.
The losses came after Musk, Tesla’s chief executive officer, said during an earnings call late Wednesday that the firm is about three years away from starting production in China. After Tesla said in June it was working with the Shanghai government to explore local manufacturing, some investors had been speculating US. President Donald Trump’s visit to China next week could herald news of a deal, said Dai Ming, a fund manager with Hengsheng Asset Management Co in Shanghai.
“The investor frenzy has cooled down,” Dai said by phone. “Three years is definitely longer than most had expected.”
Some market players were expecting an announcement that construction on a China-based plant could begin as soon as next year, said Guo Feng, head of wealth management department at Northeast Securities Co in Shanghai.
Musk said the three-year time frame was a “rough target,” urging an analyst on the call not to set their watch by it. Read more about those comments here.
