Gary Zhou 
Tesla (NASDAQ: TSLA) CEO Elon Musk landed in China earlier this week to discuss variety of topics with government brass, and analysts see it as a “key point” of the automaker as the ongoing EV price war continues.
A new note from Wedbush lead analyst Dan Ives notes that Musk has not visited China in three years. But the implications of the potential meeting between Moscow and government officials whole significant value moving forward as the automaker attempts to fend off domestic competition.
Mentioning companies like BYD, Nio, and Xpeng, Wedbush notes Tesla is far from the only EV powerhouse in the region. The production prowess of the Austin, Texas-based electric automaker remains a key advantage for Tesla moving forward, the note says.
However, Tesla plans to take advantage of its energy business in China as well, only expanding its sustainable footprint in the region.
Wedbush notes:
”Tesla also plans to build a new battery factory in Shanghai which will be capable of producing 10k new Megapacks each year and further expanding its battery capacity globally along with its US production artery.”
Wedbush expects mosque to meet with high powered and prominent members of China’s government, “including possibly Chinese Premier Li Qiang.”
Musk’s visit to China on behalf of Tesla is also a strong move for the company as the U.S. Continues to navigate through geopolitical tensions. Wedbush calls it a “tight wire act,” and Tesla is not the only company dealing with the implications of a tension-filled relationship, but ironing out its own wrinkles helps as China is a key region on “both the supply and demand front.”
Wedbush reiterated its “Outperform” rating and a $215 price target on the stock.
