Tesla Motors, Inc. TSLA signed a deal to sell about 200 electric vehicles to Dubai's Road & Transport Authority (RTA). Tesla will supply Model S sedans and Model X SUVs that will be used by the Dubai Taxi Corporation for the taxi services.
Dubai is focused on becoming a leading player in the self-driven car space. The deal will support Dubai Future Foundation's goal of making 25% of its car trips autonomous by 2030.
Recently, Tesla started selling its electric cars in Dubai, thus gaining market traction in the Middle East. Tesla’s vehicles feature second-generation hardware which improves Autopilot capabilities. Gulf States provide a wide market for luxury vehicles. However, some of the brands were affected by the drop in oil prices.
Meanwhile, Tesla has started accepting online orders for its vehicles from customers in the United Arab Emirates. The electric automaker is also building a store at the Dubai Mall and a Tesla service center in Dubai’s Sheikh Zayed Road. This is expected to open in Jul 2017. Tesla will also launch a store and service center in Abu Dhabi in 2018. It also plans to expand to Bahrain, Oman and Saudi Arabia.
The company is aggressively working on expanding its product portfolio to boost sales. Tesla’s third-generation electric car, Model 3, which costs half as much as Model S, is expected to be delivered starting late 2017. The vehicle offers a range of 215 miles per charge and acceleration of 0–60 mph in less than 6 seconds.
Tesla will start manufacturing production versions of its $35,000 Model 3 sedan in mid-2017. The automaker plans to fulfill the target of 373,000 pre-orders.
Tesla has been outperforming the Zacks categorized Auto Manufacturers-Domestic industry for over a year. In the past one year, Tesla gained 81.1% while the industry witnessed a 34.1% rise. The company’s new Master Plan, rapid international expansion and continued investment in infrastructure development are major positives. The Gigafactory construction should also prove beneficial.
Zacks Rank & Key Picks
Tesla currently carries a Zacks Rank #4 (Sell).
Better-ranked companies in the auto space include Honda Motor Co., Ltd. HMC, Fox Factory Holding Corp FOXF and General Motors Company GM. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Fox Factory has an expected earnings growth rate of around 16.6% for the current year.
Honda has an expected earnings growth rate of around 27% for the current year, while the same for General Motors is pegged at 9.4%.
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