Tesla exporting China-made Model 3 vehicles to Europe

Yahoo Finance’s Emily McCormick joins Akiko Fujita to discuss Tesla announcing that will start exporting China-made Model 3 cars to Europe.

Video Transcript

AKIKO FUJITA: Shares of Tesla in focus today. Down about 8/10 of a percent right now. The company announcing today plans to begin exporting Model 3s made in China to more than 10 European countries. The announcement coming days before Tesla is set to report its quarterly results.

Let's bring in Emily McCormick for the very latest on that front. And Emily, what are the implications here for Tesla's overall footprints given that they have really started to ramp up the activity at the Shanghai factory?

EMILY MCCORMICK: Absolutely, Akiko. And this does represent a strategy shift here for Tesla. Remember that the company just began delivering cars made at that Shanghai gigafactory in late December, and then in January to customers who were actually outside of the Tesla ecosystem. That really gigafactory has been seen as the linchpin of the next leg of success here for Tesla. The company now going to be able to really ramp up the demand that it's able to fulfill based in Europe.

And just taking a look at this new announcement, the company is going to be exporting its Model 3 vehicles made at that gigafactory to 10 European countries, which include Germany, France, Italy, and Switzerland. So major demand centers here for Tesla.

Now, remember, of course, Tesla did earlier this year break ground for its Berlin gigafactory. But that, of course, is going to take some time to actually ramp up and to scale and be able to actually manufacture vehicles, as something that we've already seen happen at a much faster than expected timeline out of Shanghai. The company has targeted building about 150,000 vehicles this year at that Shanghai gigafactory.

Now, of course, Tesla is not the only car maker to use China as a means of sending electric vehicles to Europe. We also have BMW also planning to send its iX3 electric vehicles produced at its plant in China to Europe as well. So a strategy that we're seeing at both these legacy automakers and now a Tesla here with these electric vehicles.

And, as you mentioned, this is coming just a couple of days ahead of that company's third quarter earnings results. That report coming out Wednesday after market close. We did get results reported on the delivery front. Earlier this month, the company did report a record number of deliveries at more than 139,000 during the third quarter. A big about face from what we saw from some of these other legacy automakers like General Motors and like Ford that had reported year-over-year declines in their auto sales. So Tesla's still seeing strong demand, at least based on what we've seen so far for the third quarter, Akiko.

AKIKO FUJITA: Yeah, Emily. It's interesting you talk about the strategy out of China for other car makers too. Because we've really started to see factory activity there ramp up as a result of the country being able to contain the virus to a certain extent. So we'll continue to watch that. Thanks so much for that.