Dhirendra Tripathi
Investing.com – Tesla (NASDAQ:TSLA) dipped 3% Wednesday on concerns the company may face higher scrutiny in China amid a crackdown on consumer-facing internet companies in the world’s second largest economy.
Likewise, Morgan Stanley (NYSE:MS) analyst Adam Jonas sees Tesla coming under a stronger lens in China, the largest market for its electric vehicles outside the U.S.
Over the weekend, Chinese authorities asked ride-haling company Didi not to onboard new users until its data privacy and security policies have been reviewed. It asked WeChat and Alibaba (NYSE:BABA) to take the app off their stores.
Similar treatment was meted out to online recruitment firm Kanzhun (NASDAQ:BZ).
With many Chinese internet companies listed in the U.S., there are concerns in the communist country over the trove of user data they may have to share as part of disclosure norms for the Securities and Exchange Commission.
The analyst has in the past expressed concerns around the commercialization of AI in consumer applications and the governments, through a national security lens, apply a regime that could limit, if not outright exclude, the role of foreign players in their domestic autonomous transport networks.
“As an exercise, ask yourself this: Can you imagine a Chinese-owned autonomous, electric transport network providing mobility services to the citizens of Boston or Pittsburgh," Jonas wrote in his note, according to StreetInsider.
Jonas reiterated an overweight on Tesla with a $900 target, almost 41% higher from its current level of $640.