Al Root
Tesla stock fell to start a new week ahead of the Federal Reserve's interest-rate decision on Wednesday. If shares end lower, they'll snap a five-day winning streak.
Shares of the electric vehicle maker were off 1.6% to $226.71 in morning trading. The S&P 500 was flat and the Dow Jones Industrial Average was up 0.6%.
There isn't a lot of Tesla-specific news for shares to react to on Monday. There was a weekend tidbit, though. The company announced it had manufactured Tesla's 100 millionth 4680 battery cell. Those are Tesla's larger, most-advanced batteries that are cost-efficient and store more power, providing a longer range.
Tesla announced the accomplishment on X with a picture of Tesla's humanoid, labor-saving robot Optimus holding a battery cell. Videos of Optimus sorting batteries are circulating on X, and one employee said Optimus played a "(very) small role" in hitting the 100 million mark.
That has the potential to energize investors a little. Tesla uses artificial intelligence-based computing to train robots the company hopes to use in its factories, eventually, and sell to others. Deutsche Bank analyst Edison Yu says Tesla is becoming a leader in AI. He rates Tesla stock at Buy with a $295 price target. The robot opportunity accounts for $22 of that target.
As for the industry, shares of REE Automotive soared 18% in early trading to $3.51 apiece after raising about $45 million from an automotive parts supplier Motherson Group.
REE develops modular electric vehicle platforms that companies can use to make EVs of different shapes and sizes without the need to invest directly in battery, motor, and software technology. The company is still small and doesn't compete directly with Tesla. Still, capital coming into the EV space is a small example that investors still favor the technology.
As for the market, investors are waiting for the Fed to make a decision on short-term interest rates on Wednesday. Traders expect a 0.25 or 0.5 percentage-point cut. Lower interest rates can help car companies. Most cars are bought with financing, and lower rates bring monthly payments down.
A little further down the road, investors are waiting for Tesla's Robotaxi Day on Oct. 10, when the company is expected to unveil one such vehicle and give an indication about when a Tesla-built autonomous cab service could begin. Tesla also uses AI-based computing to train its self-driving cars.
That event will surely move the stock. Where it goes after, however, is tough to say. Future Fund Active exchange-traded fund co-founder Gary Black ran a poll on X asking his 440,000-plus followers what they think will happen. Roughly 50% believe Tesla stock will go up and about 50% believe it will go down.
Coming into Monday trading, Tesla stock was down about 7% year to date, trailing the S&P 500 by some 25 percentage points. Falling EV sales have weighed on investor sentiment. Tesla shipped about 831,000 vehicles in the first half of 2024, down about 7% year over year.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
September 16, 2024 10:18 ET (14:18 GMT)
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