- Markets Insider
- Chinese officials blocked the import of 1,600 Tesla Model 3 cars, the country’s Caixin news service reported Tuesday.
- Tesla shares sank as much as 5% following the report, to their lowest prices since October.
According to Reuters, officials in Shanghai reported “various irregularities” in 1,600 Model 3’s set for delivery in the country, including improper labelling.
“Some of the vehicles had no Chinese labels on brake fluid tanks, while some demonstrated a real motor capacity that differed from the one on the label,” Caixin reported.
A Tesla spokesperson told Business Insider that the issues were due to a printer error and have since been rectified.
“This error resulted from misprinted labels on certain Model 3 vehicles,” the representative said. “We have already reached a resolution with Chinese customs, and we are working closely with them to resume clearance procedures on these vehicles. Sales of Model 3 in the country are not impacted, and we continue to deliver Model 3 vehicles that have already been processed.”
Trading volumes for Tesla also spiked to levels not seen in months, according to Markets Insider data.
Tuesday’s slump has once again sent the stock price to its lowest level since October, when shares jumped on a surprise third-quarter profit. However, a renewed fight with federal regulators and more executive departures have once again brought the stock below $300.
Despite the flurry of news announced by CEO Elon Musk last week – a $35,000 Model 3 and an end to the company’s retail stores – Wall Street analysts remain slightly optimistic about the stock’s potential.
There were 13 buy ratings from analysts Tuesday, according to data compiled by Bloomberg, with 8 holds and 14 sells. The analysts’ average price target works out to $325, about 15% above Tuesday’s prices.
“We believe the sooner-than-expected announcement of the $35K model 3, rather than reflecting dramatic progress on manufacturing and distribution costs, likely reflects the need to replenish cash after the convert repayment, perhaps exacerbated by the weak first two months of US sales,” Barclays said in a note to clients on Tuesday.
Tesla’s Shanghai Gigafactory could help offset any demand slowdown in the US. The company broke ground on that site in January – and it could help Tesla dodge any further escalation of Trump’s trade war.