Tesla (NASDAQ: TSLA) stock wasn’t looking too grand or powerful in the first trading session after the President’s Day market holiday. The electric vehicle (EV) king’s shares took it on the chin, with investors trading them down by more than 5%. By contrast, the S&P 500 index “only” declined by 2% on the day.
This was mostly due to several pieces of bad news for Tesla. The first comes from China where the company’s recently sold EVs notched a decline in total insurance registrations.
That wouldn’t necessarily cause concern. However, Tesla’s local rivals saw notable gains in that metric last week, according to statistics compiled by CNEV Post. BYD, which has gained renown lately because it remains a sizable equity holding of Warren Buffett’s Berkshire Hathaway, led with slightly over 37,000 registrations. That was well over the 31,417 of the previous week.
Nio, another China-based Tesla rival, recorded 3,174, up from the preceding 3,045. Yet Tesla’s 5,913 last week was significantly down from the former week’s 6,963.
Meanwhile, over the President’s Day weekend, Tesla attracted the wrong kind of headlines with reports of two crashes that were widely disseminated online. One occurred in Wenzhou, China and another in California. Each resulted in one fatality.
This occurred just after Tesla recalled 362,000 of its vehicles due to software flaws in their assisted driving systems. Some have alleged that these systems are at the root of numerous crashes.
One week of China new-car insurance registrations certainly doesn’t portend a permanent decline, but it’s not an encouraging sign for Tesla either, particularly considering that local competitors saw notable gains.
We can say the same for those unfortunate accidents. They don’t necessarily indicate serious problems with all (or even most) Teslas. However, the company is under a microscope in terms of safety, and such incidents increase regulatory and consumer suspicion.
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