Tesla stock continues to drop as the EV Giant launches another round in the EV price war

Tesla (TSLA) launched new, shorter-range versions of its Model S and Model X sedans late Monday, slashing the price of luxury electric vehicles in the United States by $10,000. Tesla stock fell slightly on Tuesday, extending losses after hitting a sell signal last week. American luxury startups for electric cars Rivian (countryside) And Lucid (LCID) also blinked.

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Cathy Wood and her company, Ark Invest, have sold nearly 120,000 shares of TSLA over the past three sessions.

Tesla is now offering a new Standard Model S for $78,490. The new base model S offers up to 320 miles of range, according to the company’s website. Meanwhile, the new Standard Model X is now offered starting at $88,490 with a range of 269 miles per charge.

Tesla stock fell 2.4% to 234.00 in Tuesday’s market trading. On Monday, shares fell 1.2% to 239.76.

Tesla lowered car prices around the world several times in 2023 and also offered discounts, which triggered a price war for electric cars.

The new Model S and X are $10,000 cheaper than the list price of previous base variants of those luxury electric cars. But currently, buyers can find a stock Model S SUV with a 405-mile range for about $81,000. The price of all-wheel drive Inventory Model X cars is about $93,000, according to Tesla’s website.

The batteries in the new Model S and Model X vehicles with the standard range are the same as the long-range options. However, cheaper new cars have battery packs that are unlocked with software, Electric reported Tuesday. According to Electrek, Tesla has shut down about 21% of battery capacity.

On Sunday, Tesla cut prices for the Model Y on its high-end variants by $1,930 in China. It also offered a new $1,100 China Insurance subsidy for Model 3 buyers.

Tesla’s latest price cuts come amid rumors swirling that an updated Tesla Model 3, codenamed Highland, is set to launch soon in China. Investors are also awaiting any updates on the cheaper next-generation car that is scheduled to be produced at Tesla’s new, yet-to-be-built, plant in Mexico.

Tesla stock

TSLA has slumped since its second-quarter financials on July 19, as investor concerns about declining gross margins outweighed the global electric car giant’s earnings and revenues above expectations.

Tesla stock fell 4.4% to 242.65 last week. This move undermined support at the stock’s 50-day and 10-week moving average, ending Friday 6.7% below this technical level of support. Ending the week more than 2% below 10-week is an important sell signal, according to IBD Analysis.

Rivian, which makes the R1T Pickup and R1S SUV, sank 3%. LCID fell 5% on Tuesday. Lucid recently slashed the prices of its Model S competitor, the Lucid Air, by as much as $12,400. The Model S competitor now starts at $82,400.

Cathy Wood sells shares of TSLA

Cathie Wood’s ARK Investment Management sold a total of 117,146 shares for three consecutive sessions. On Monday, Wood offloaded $2.15 million in TSLA, according to the company’s daily trade disclosure. On Friday, Kathy Wood sold $7.7 million in Tesla stock. Kathy Wood started her latest dump in Tesla with more than 76,000 shares for about $18.75 million Thursday.

Separately, David Tepper’s Appaloosa management disclosed in an SEC filing that it sold its Tesla stock stake in the second quarter. Appaloosa started at Tesla’s position in Q1.

Tesla stock ranks third in IBD Automotive Group. It has a composite rating of 97 out of 99. Tesla has a 91 relative strength rating and its EPS rating is 94 out of 99.

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