Shares of Tesla Inc. (TSLA) were down over 3% in pre-market trading, as investors appeared to take profits following the electric vehicle maker's recent post-election rally.
Tesla's stock had surged nearly 40% since Donald Trump's reelection victory on November 5th, buoyed by optimism that the new administration's policies could benefit the company's autonomous driving and robotaxi initiatives. However, the euphoria appears to be waning amid concerns over Tesla's slowing growth prospects and lofty valuation.
While Tesla's Bitcoin holdings have appreciated significantly, reaching a value of around $1 billion as the cryptocurrency hit a new all-time high, analysts have raised concerns about the company's core electric vehicle business. Tesla's EV sales growth has been slowing, and it faces increasing competition from low-cost manufacturers like China's BYD, which offers vehicles priced as low as $10,000. This has put pressure on Tesla's profitability and raised doubts about the sustainability of its current valuation.
Additionally, there are concerns that the potential for escalating trade tensions between the US and China under the new Trump administration could impact the global tech and automotive industries, including Tesla. Trump is reportedly considering elevating China hawks like Marco Rubio and Mike Waltz to key positions, which could further strain relations between the two superpowers.