China has mandated that a big chunk of government-purchased cars be electric vehicles. The market can’t make up its mind whether that’s good news for Tesla Motors.
On Saturday, China posted new rules that would require at least 30% of government auto purchases to be electric vehicles. Word of that decision helped send shares of Tesla up 0.8% this morning–and even higher in pre-open trading. Soon after, they fell as much as 1.2%, before bouncing back. Tesla’s shares were up 2.3% at $223.15 at 10:55 a.m.
It’s not hard to see why investors might question whether the China news is good for Tesla. China has a history of making life difficult for non-Chinese companies to do business in the world’s second largest economy, and only a bit more than a week ago, Beijing said it would start building charging stations that wouldn’t be compatible with Tesla’s technology. Of course, China does love its luxury cars, and there’s no more luxurious electric vehicle than a Tesla.
Read more at Barron’s.