Tesla launched new, shorter-range versions of its Model S and Model X vehicles late Monday, slashing the U.S. price tag on its base luxury electric vehicles by $10,000. Tesla stock fell slightly Tuesday, extending losses after hitting a sell signal last week. U.S. luxury EV startups Rivian and Lucid also retreated.
Cathie Wood and her Ark Invest firm has sold nearly 120,000 shares of TSLA over the last three sessions.
Tesla is now offering a new standard Model S for $78,490. The new base Model S offers a range of 320 miles, according to the company's website. Meanwhile the new standard Model X is now offered at a starting price of $88,490 with a range of 269 miles per charge.
Tesla stock fell 2.8% to 232.96 Tuesday during market trade. On Monday, shares dropped 1.2% to 239.76.
Tesla has slashed vehicle prices worldwide multiple times in 2023 and has also offered discounts, kicking off an EV price war.
The new Model S and X models are $10,000 cheaper than the list price of the previous base variants of those luxury EVs. But buyers can currently find inventory all-wheel-drive Model S vehicles with 405 miles of range for around $81,000. Inventory Model X all-wheel-drive vehicles are priced at about $93,000, according to Tesla's website.
The batteries in the new standard range Model S and Model X vehicles are the same as the long range options. However, the new cheaper vehicles have software-locked battery packs, Electrek reported Tuesday. Tesla has locked about 21% of the battery capacity, according to Electrek.
On Sunday, Tesla cut Model Y prices on higher-end variants by $1,930 in China. It also offered a fresh insurance subsidy for Model 3 buyers in China worth $1,100.
Tesla's recent price cuts come as rumors swirling that an updated Tesla Model 3, code-named Highland, is set for an imminent release in China. Investors are also awaiting any updates on the cheaper next generation vehicle which is set to be produced in Tesla's new, not yet built, factory in Mexico.
Futures: Market Rally Breaks Key Levels
Tesla Stock
TSLA has been pulling back since second-quarter financials on July 19, as investor concerns over falling gross margins is outweighing the global EV giant's above-forecast earnings and revenue.
Tesla stock declined 4.4% to 242.65 last week. That move undercut support at the stock's 50-day, 10-week moving average, finishing Friday 6.7% below that technical level of support. Finishing the week more than 2% below the 10-week is a significant sell signal, according to IBD analysis.
Rivian, which makes R1T pickup and R1S SUV, sank 3.6%. LCID slid 5.3% Tuesday. Lucid recently slashed prices on its Model S rival, the Lucid Air, by as much as $12,400. The Model S rival now starts at $82,400.
Cathie Wood Sells TSLA Stock
Cathie Wood's ARK Investment Management has sold a total of 117,146 shares three consecutive sessions. On Monday, Wood unloaded $2.15 million in TSLA, according to the company's daily trade disclosure. On Friday, Cathie Wood sold $7.7 million in Tesla stock. Cathie Wood kicked off her recent Tesla dump with more than 76,000 shares for about $18.75 million on Thursday.
Separately, David Tepper's Appaloosa Management disclosed in an SEC filing that it sold its Tesla stock stake in Q2. Appaloosa had started the Tesla position in Q1.
Tesla stock ranks third in IBD's automaker industry group. It has a 97 Composite Rating out of 99. Tesla has a 91 Relative Strength Rating and its EPS Rating is 94 out of 99.
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