Tesla (TSLA) Stock Price Slips Again in Premarket on Two Fresh Negative Catalysts from China
Shares of Tesla (NASDAQ: TSLA) are down 0.5% in pre-open Friday trading after Chinese regulators said the EV giant will recall 19,697 imported model S vehicles, 35,836 imported model 3s, and 144,208 China-made Model 3 vehicles in China.
The total number of recalled vehicles is nearly 200,000 units, which adds to roughly 475,000 vehicles that will be recalled in the United States. The State Administration for Market Regulation said that Tesla cars will be recalled due to possible security risks.
"The rearview camera cable harness may be damaged by the opening and closing of the trunk lid, preventing the rearview camera image from displaying," the US NHTSA said in a report.
In another negative catalyst for Tesla stock, the Chinese government confirmed its plans to terminate its subsidy policy for new-energy vehicle (NEV) purchases from 2023. In 2022, subsidies will be reduced by 30% compared to 2021.
In the meantime, Tesla raised prices for its China-made rear-wheel-drive Model Y EV units to 301,840 yuan ($47,347) from the prior 280,752 yuan. The rear-wheel-drive Model 3 price is now 265,652 yuan, an increase of 10,000 yuan.
Following a recall of 475,000 vehicles announced yesterday, Tesla analyst Trip Chowdhry of Global Equities Research told clients that recall news is a "non-event" and investors should "buy the weakness."
Tesla stock price closed 1.46% lower yesterday at $1,070.34.