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Tesla Stock Nosedives Further After Fresh China Price Cuts: Is Risk Of Losing Key $100 Mark Very Real Now?

Benzinga · 01/06/2023 06:27

Tesla Inc. (NASDAQ:TSLA) shares were sliding about 5% in premarket trading on Friday.

What Happened: The electric vehicle maker lowered the prices of its Model 3 and Y vehicles in China — its fourth downward price adjustment in the country since late October. The latest price cuts are in the range of 5.7% to 13.5%.

See Also: Best Electric Vehicle Stocks

Even with these cuts, the lowest price of a Tesla vehicle in China is around $34,000. Tesla bulls have been calling for a sub-$30k car in China to take on the competition. Tesla investors may also fret over margin erosion that will impact profitability.

After plunging over 12% on Tuesday, the first trading session of the year, on sub-par fourth-quarter deliveries, the Tesla stock recovered on Wednesday, adding over 5%. The see-sawing mood continued as the stock fell 2.90% on Thursday.

If the premarket losses are sustained, Tesla could retest its Tuesday’s low of $104.64, which happens to be its lowest level since mid-August 2020. The next support could be around the $100 psychological mark and further down it has support around $94.5.

The jobs report due to be released ahead of the market open may also have a role in dictating sentiment toward the stock, given the impact the number has on the broader market sentiment.

Price Action: In premarket trading, Tesla was down 5.01%, to $104.81, according to Benzinga Pro data.