TSLA Stock News: Tesla sinks to start the week after lowering prices in China

Tesla (TSLA) was trading well lower to start the day but did manage to recoup most of its losses by the closing bell. On Monday, shares of TSLA fell by 1.5% after trading lower by as much as 7% earlier in the session. Despite weakness in the EV sector and in Chinese stocks, all three major averages rose higher for the second straight day as investors await crucial big tech earnings reports later this week. Overall, the Dow Jones added 1.3%, while the S&P 500 and the NASDAQ rose by 1.2% and 0.9%, respectively, during the session. 

Tesla stock price

The main reason for Tesla’s early session losses was a Wall Street Journal report that revealed the company is dropping prices for its vehicles in China. The Model Y and the Model 3 will see a reduction of 9% and 5%, respectively, which is a curious move given Tesla just raised prices as recently as June. The softening demand for Tesla has been a talking point for investors in recent months, so much so that CEO Elon Musk even addressed it in the latest earnings call. With domestic EV makers like Nio (NIO) and BYD pushing out new models, Tesla could be feeling the pressure in the world’s largest automotive market.

Electric vehicle stocks were under some pressure on Monday. Chinese EV stocks were plummeting alongside the Hang Seng Index in Hong Kong as President XI’s third term of power is not sitting well with investors. Nio fell by 15.7%, XPeng (XPEV) by 11.9%, and Li Auto (LI) by 17.4%. Lucid (LCID) and Rivian (RIVN) were also trading below water, as Tesla’s status as an EV bellwether dragged down the broader sector. 

TSLA 5-minute chart 10/24/22