On the morning of May 20, American electric carmaker Tesla (TSLA) was trading with a 7.5% daily loss at $195.26. Last week, the stock fell nearly 12% to $211.03, its lowest level since December 2016.
These losses came after a storm of negative factors affected the company amid ongoing US-China trade tensions. Here are some of the negative factors that are driving Tesla stock down today.
Wedbush cuts its target on Tesla
Today before the market opened, Wedbush Securities cut its target price on Tesla stock to $230 from $275 according to Thomson Reuters. Analysts at the brokerage company continue to doubt Tesla’s future growth potential partly due to worries about declining Model 3 demand in the US market.
Other negative factors
Last week, in an email to employees, which was revealed by Electrek, Tesla CEO Elon Musk emphasized the need to examine every small or large expenditure at the company. Musk deemed this necessity “extremely important” for Tesla’s success.
In another blow to Tesla, the National Transportation Safety Board published a preliminary report about the Tesla Model 3 crash that occurred on March 1, 2019. In the report, the investigating authorities said that at the time of the crash, Tesla’s autopilot system had been active. The driver had activated it nearly ten seconds before the crash.
What to expect next?
In the second quarter so far, Tesla stock has underperformed the broader market by a wide margin. Tesla has fallen 24.6% quarter-to-date compared to the S&P 500 Index’s (SPY) 0.9% rise. Today’s massive losses took Tesla below $200, making the situation worse for Tesla investors.
The ongoing stock market sell-off due to escalating US-China trade tensions is also pressuring Tesla stock today.