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TSLA stock may soar even with India expansion plans on hold


  • You’re here (NASDAQ:TSLA) suspends India expansion plans
  • Indeed, Elon Musk could not reach an agreement with the Indian authorities on import taxes
  • TSLA stock may rally in the future as Tesla pursues other international markets

Source: Ivan Marc / Shutterstock.com

You’re here (NASDAQ:TSLA) is up today, even after the company suspended plans to enter the Indian electric vehicle (EV) market. Earlier in 2022, the leader in electric vehicles seemed on the verge of finally settling in India. TSLA stock reacted well to this news.

Investors learned this morning that Elon Musk has failed to reach a resolution with the Indian government over the country’s high import taxes. There is, however, a light silver lining. The CEO has his eyes on the promising electric vehicle market in Indonesia. The smaller nation may be willing to provide what India was not.

What’s going on with TSLA stocks

Although TSLA stock is in the green today, it’s not because of the news out of India. This morning, Musk tweeted that his acquisition of Twitter (NYSE:TWTR) is “temporarily pending” while it waits for data on the platform’s fake userbase. Tesla investors can breathe a sigh of relief as Wall Street awaits details of Musk’s plans to take over another company.

As of this writing, TSLA stock is up almost 7% for the day and shows no signs of stopping. After a difficult week of trading, this catalyst sets Tesla up to close today on a positive note.

What this means

There are two central lessons investors should take from this morning’s events. The first is that halting its expansion plans in India is not a strong enough catalyst to drive TSLA’s stock down. Would it have been advantageous for the company to start producing vehicles in one of the largest electric vehicle markets in the world? Yes absolutely. But even after the company announced it would not expand into India, shares continue to rise steadily. Tesla succeeded before serious talks began with the Indian government and it will continue to move forward.

Second, a partnership with Indonesia would provide excellent growth catalysts for Tesla. The country is one of the main producers of nickel, a key component of electric vehicle batteries. Ever since Russia’s invasion of Ukraine caused nickel prices to spike, supplies of the metal have been tight. Moving to Indonesia would give Tesla access to a very important material, increasing its competitive advantage over other electric vehicle producers.

Unlike India, Indonesia is likely to want to strike a Tesla-friendly deal. The country has worked hard to revamp its automotive sector. Musk met with an Indonesian delegation last month to discuss a potential partnership. He is now traveling to the country to meet its president.

The essential

Investors should remember one key thing to remember. Tesla’s potential deal with Indonesia isn’t just a means of international expansion. It is a strategic attempt to hedge its global supply chain bets while simultaneously gaining share of a new market for electric vehicles. This forward-thinking mindset will serve the company and its investors well as Tesla pivots to stay ahead of its competitors in an ever-growing market.

TSLA stock is still struggling against negative market forces. Although there will likely be more turbulence ahead, a partnership with Indonesia is exactly the catalyst he needs to keep moving forward.

At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.



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