Skip to main content

Market Overview

What China Means For Ford And Tesla

What China Means For Ford And Tesla

The U.S. trade war with China has dominated Wall Street headlines in 2018, and two of the largest U.S. auto companies, Ford Motor Company (NYSE: F) and Tesla Inc (NYSE: TSLA) are caught in the crosshairs.

China provides a massive long-term growth opportunity for both Ford and Tesla, but it can be an extremely difficult market to tap, especially in the middle of a trade war.

Tesla’s China Approach

Tesla said in its Q3 earnings report the company plans to respond to the trade war and the new 40 percent Chinese tariff on imported American cars by moving “portions of Model 3 production to China during 2019.” The news comes on the heels of an announcement earlier this year that the Shanghai government approved the construction of a wholly owned Tesla factory in the region. Tesla also said last week it has purchased 210 acres of land to build a third Gigafactory in China.

Tesla said the Chinese tariffs will take a $50 million bite out of the company’s gross profits in Q4.

Ford’s China Woes

Ford also addressed China after reporting a $378 million loss in its China business in the third quarter. China sales declined 43 percent in September, and Ford also lost market share in the third quarter as well. The disappointing quarter came after Ford announced earlier this week it plans to separate its China business into its own unit called Ford China starting Nov. 1.

Ford CFO Bob Shanks said tariffs have cost Ford about $1 billion in profits so far in 2018 and will likely add another $200 million in future costs.

Following their respective Q3 earnings beats, both stocks were up about 7 percent Thursday at time of publication.

Related Links:

Why Investors Are Optimistic When A Company Moves Forward An Announcement Date

US, China Announce New Tariffs: Wall Street Reacts


Related Articles (F + TSLA)

View Comments and Join the Discussion!

Posted-In: China Donald Trump Model 3Earnings News Emerging Markets Top Stories Markets Best of Benzinga

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at