Tesla (TSLA) stock dropped Wednesday after CEO Elon Musk disclosed Tuesday evening he sold shares worth $4 billion in the first two weeks of November.
Musk sold 19.5 million shares for $3.95 billion on Nov. 4, 7 and 8, according to SEC filings late Tuesday. The decision to sell some of his Tesla stock comes as Musk has finalized his $44 billion purchase of Twitter.
Tesla stock edged down 1.7% Wednesday during market trading. On Tuesday, shares fell 2.9% to 191.30 but was well off the session low 186.75 as the broader market gained steam. TLSA Shares are down more than 40% on the year and approaching May 2021 lows, according to MarketSmith analysis.
Tesla stock has sold off hard since Musk’s Twitter takeover Musk’s latest share sales likely helped drive Tesla stock’s recent decline. Increased China subsidies and concerns about Elon Musk’s Twitter reign also may be taking a toll on TSLA stock.
Clash Of the Titans: Tesla Vs. BYD
Tesla is also recalling more than 40,000 2017-2021 Model S and Model X vehicles over a possible power steering assist feature, Reuters reported Tuesday. Tesla is handling the recall via an over-the-air update.
Can Insurance Subsidy Boost Tesla Stock?
On Tuesday, Tesla brought back an insurance subsidy for vehicles purchased in China through year-end, following a price cut in late October as the EV giant tries to boost demand amid soaring production.
The EV giant announced the November insurance subsidy is worth 8,000 yuan ($1,100) for people buying its vehicles in inventory, as the company looks to increase orders. In December, the subsidy will be reduced to 4,000 yuan ($550). Tesla stock dropped Tuesday.
Tesla previously introduced a 7,000 yuan insurance subsidy on all vehicles in late September, as wait times for its EVs fell essentially to zero. From Oct. 1, Tesla has offered 0% down payments and preferential loan rates. Those incentives served as de facto price cuts.
Tesla cut actual Model 3 and Model Y prices in China on Oct. 24 by as much as 9%. Following those October price cuts, Tesla briefly eliminated the insurance subsidy it had implemented in September before reviving it Tuesday.
Tesla Stock: China Deliveries
Tesla delivered 71,704 vehicles from its newly upgraded Shanghai plant in October, according to the China Passenger Car Association. That was up 32% vs. a year earlier but down nearly 14% from the record 83,135 in September. Tesla exported a record 54,504 vehicles from the Shanghai plant in October, and sold 17,200 in China.
The global EV giant reported Q3 deliveries of 343,830 cars, up 42% vs. a year earlier and above Q1’s record 310,048. However, that was well below analysts’ estimates.
The company said it faced logistical challenges throughout the quarter and that there were vehicles in transit.
Tesla produces the luxury Model S sedan, the Model X SUV as well as the Model 3 sedan and Model Y crossover. Other vehicles in the works include the Semi and Cybertruck. Musk has said the Cybertruck is on track for mid-2023 rollout and that the Tesla Semi will begin deliveries by the end of 2022.
Semi Production Starts
Musk tweeted in October that Tesla was starting production on the Tesla Semi tractor trailer trucks. Deliveries to PepsiCo (PEP) were set to begin on Dec. 1. Musk says the electric semi trucks will have a 500-mile range per charge.
Tesla production is surging, especially in China, so demand needs to rise substantially in Q4 and beyond to match supply. China EV subsidies expire on Dec. 31, while Germany will reduce its subsidies as of Jan. 1. That should pull forward demand for Tesla and other EV makers, but could mean weaker demand in the new year.
Unofficial China vehicle registration data for the first week of the month shows the U.S. EV giant trailing rival BYD (BYDDF) by a large margin for overall vehicle unit sales. New vehicle insurance registrations in China between Oct. 31-Nov. 6 totaled 110,539, up 43% compared to last year but down 12% from the previous week, CnEVPost reported Tuesday.
BYD, the world’s largest maker of EV and plug-in hybrids and China’s largest seller of pure electrics, led the way with 37,168 insurance registrations. Elon Musk’s Tesla was second with 11,195 registrations.
China EV startups Nio (NIO), Li Auto (LI) and XPeng (XPEV) were far behind, but among the top 14 vehicle manufacturers.
Since Elon Musk took over Twitter on Oct. 28, he’s slashed roughly half of the social media site’s staff while tweeting frequently about his plans, politics and more. There are concerns that Musk is distracted from running Tesla, as well as worries that he could be hurting his image, which could spill over to Tesla’s brand. Tesla stock has shed around 17% since Oct. 28.
Tesla stock has a 45 Composite Rating of 99. TSLA shares have a dismal 16 Relative Strength Rating. The EPS rating for Tesla stock is 75.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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