Tesla stock fell again Tuesday after ending last week in the red. News from Ford Motor affected Tesla and the broader electric vehicle sector.
Tesla stock dropped 3.1% on Tuesday, closing just below $194 a share, while the Nasdaq Composite and S&P 500 were down 0.9% and 0.6%, respectively. Ford stock fell 0.4%.
Ford said Tuesday is cutting prices of 2023 Mustang Mach-E crossover vehicles by about $3,100 to $8,100, depending on the version. The company said it isn’t discounting 2024 models.
Chinese EV maker XPeng also had some pricing-related comments that could be weighing on Tesla shares. XPeng management warned of intense competition in the EV sector that could end in a “bloodbath,” CNBC reported Monday.
Ford’s price cut is a sign there is excess EV inventory left to clear out and, taken with XPeng’s comments, shows that pricing will remain under pressure for a while.
Tesla’s profit margins have been squeezed as competitors have stepped up production, resulting in many EV makers cutting prices. Tesla’s fourth-quarter operating profit margin came in at about 8%, down about eight percentage points year over year. Wall Street expects operating profit margins of about 9% in the first quarter.
Reports of Cybertrucks rusting probably aren’t helping shares either. Tesla started shipping its avant-garde pickup truck in November. The truck’s frame is covered in unpainted stainless steel, which can rust.
Shares of Tesla’s peers were also down on Tuesday. Lucid Group fell 0.8%. NIO shares were down 2.9%, and BYD stock fell 4.3% in Hong Kong trading. General Motors stock was down part of the trading day but ended higher closing up 0.8% at $39.01.
Tesla stock is well off its 52-week high of $299.29 reached last summer.
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