Embattled Tesla Bolsters Its Investment in China Unit Over 40-Fold to Make a Car —Yicai Global
What happened: Tesla’s China unit, the first one overseas, has lifted its registered capital to RMB 4.7 billion ($682 million) from RMB 100 million which is a 46-fold increase. The high-end EV maker also widened the unit’s business scope to car parts and plans to roll out its first products by 2020.
Why it’s important: Tesla has been facing heavy losses in the second quarter of this year. The company’s CEO Elon Musk announced taking Tesla private in August but apparently abandoned the plan. Musk’s strange behavior during the past month has attracted attention. Tesla’s stock has taken a hit falling 6% after Musk smoked a joint and used a flamethrower during a live broadcast of a radio show on Thursday. Despite the circus surrounding its stocks, Tesla’s plans for China seem clear. Musk previously announced an investment of $2 billion or higher into its first Gigafactory in China, which will have an annual capacity of 250,000 vehicles. The factory will enable Tesla to avoid high tariffs and ensure a steady supply for the world’s largest automobile market.