Shares of automaker Tesla Inc. (TSLA, Financial) are up on Wednesday, rising 1.15% on the day.
The automaker’s stock is being supported by the closure of General Motors Co. (GM) plants and layoffs. GM’s closures are an attempt to cut back on costs and focus the company’s efforts on high-growth areas, including electric and driverless vehicles.
GM is shuttering five factories and laying off 15,000 workers in the process. The move will save GM $6 billion annually, but it opens up opportunities for Tesla.
Tesla is seen as the frontrunner to purchase GM’s idle plants in an attempt to expand the automaker’s automobile production. Tesla was reported as lagging behind on the company’s Model 3 production in June. CEO Elon Musk’s target for production missed the mark in August despite production increasing at the company’s plants.
GM’s production plants, and recently laid off workforce, offer an opportunity for Tesla to purchase plants that are ready for production in areas where a skilled workforce is sitting idle.
Tesla vehicles reached another milestone on Wednesday, as the company celebrates one billion autopilot miles driven. Tesla’s autopilot is semi-autonomous. The company recommends drivers remain behind the steering wheel with their hands on the steering wheel to monitor activity at all times.
The automaker has overcome charges from a former employee that was charged with embezzling $9.3 million from the company. Tesla’s head of global security, Jeff Jones, also announced that he is no longer working at the company after just 11 months.
Jones, who once reported directly to Musk, was dismissed in mid-November, with Tesla only claiming that his position was “no longer needed.”
Tesla’s stock has been able to withstand headwinds from reports that the company’s sales in China dropped 70% in October compared to a year prior. WM Motor CEO Freeman Shen came to Tesla’s defense, claiming that the report is misleading because the Chinese Passenger Car Association is not always accurate.
The statement helped ease investors’ minds on Wednesday. Shen said that automakers can disclose vehicle sales at their own will, and this can be any number “you want.”
Tesla cited tariffs as a main reason its sales in China fell 30% in the third quarter of the year and 6% through the first nine months of the year. Expiration of tax rebates were also blamed as a reason for the sales slump in China.
Disclosure: The author does not have any stake in the listed equities.
