Tesla increased prices slightly in China late Wednesday on the long-range versions of its Model 3 and Model Y. Meanwhile, Tesla stock dipped early Thursday after HSBC initiated coverage of TSLA with a "reduce" rating.
The global EV giant hiked the price on the long range Model Y by $206 and raised the Model 3 trim price by $344 Wednesday, citing higher costs. Earlier in the week, local media in China had reported that Tesla salespeople were telling customers Model Y prices were about to go up in China, saying it was a continuation of the $1,920 price increase to the Model Y Performance trim in late October.
The slight price increases come as Tesla insurance registrations in China totaled 14,000 for the week ending Nov. 5, up nearly 30% vs. 10,800 the week prior, according to data compiled by CnEVPost. These are the first numbers that represent a full week since Tesla began delivering its revamped Model 3.
The EV company unveiled its new Model 3 in China on Sept. 1 with official sales beginning on Oct. 19. The global EV giant started delivering the Model 3 on Oct. 26. Tesla also launched a slightly updated Model Y earlier in October.
Tesla Eyes Record Q4
However, Tesla insurance registrations, a rough gauge for deliveries, in China are still below Q3 levels. Tesla is targeting record Q4 numbers in order to reach its 2023 goal of 1.8 million vehicle deliveries.
Tesla sold 72,115 China-made vehicles in October, up 0.57% from 71,704 last year, but down 2.6% from 74,073 in September, according to China Passenger Car Association (CPCA) data released last week. On Wednesday, the CPCA presented more detailed numbers showing Tesla delivered 28,626 vehicles in China, up 66% vs. last year but down 34% from September. Tesla exported 43,489 China-made vehicles last month.
The EV company delivered a total of 47,164 China-made Model Y vehicles and 24,951 China-made Model 3 units according to the CPCA.
Tesla stock sank 5.5% to 209.98 Thursday during market action. On Wednesday, shares edged down a fraction to 222.11. On the week, TSLA is down 4.5%.
Requirements For Rebound
HSBC initiated coverage of Tesla stock Thursday with a reduce rating and 146 price target. Analyst Michael Tyndall wrote that Tesla vehicles may well be the main driver of revenue and profits currently, but the future for Tesla is about robots, autonomous vehicles, energy storage and supercomputers.
"We see considerable potential in Tesla's prospects and ideas, but we think the timeline is likely to be longer than the market and valuation is reflecting," Tyndall wrote.
The analyst added that Chief Executive Elon Musk presents a "considerable singleman risk."
Meanwhile on Monday, Morgan Stanley analyst Adam Jonas wrote investors should look for a number of factors that would signal the Tesla stock slide is halting.
Jonas wrote Tesla must stop missing consensus EPS estimates while successfully launching new vehicles, including but not limited to the Cybertruck. The Morgan Stanley analyst added Tesla must demonstrate its business model is moving toward licensing and software and other products that have "relevance beyond the auto market."
"The Cybertruck bar has been significantly lowered," Jonas wrote Monday. "While we continue to view the model as relatively insignificant within the grand scope of Tesla's future portfolio, we would not underestimate the impact of launch/ramp execution on sentiment."
Tesla is due to begin the preliminary Cybertruck deliveries on Nov. 30.
Tesla Stock Falls After Third-Quarter Earnings
TSLA shares had dropped around 10% since the company reported worse-than-expected Q3 earnings and revenue on Oct. 18. Tesla reported third-quarter earnings down 37% to 66 cents per share, the lowest in two years for Elon Musk. Meanwhile, quarterly revenue increased 9% to $23.35 billion. Tesla's auto gross profit margins, excluding regulatory credits, fell to 16.3%.
Elon Musk on the earnings call also preached caution, offering investors warnings about the upcoming Cybertruck and the broader economy. The following day, Tesla stock fell 9.3%.
Since the beginning of 2023, Tesla stock has advanced around 78%, broadly outperforming the broader S&P 500 index.
Last week, Tesla stock rebounded for a 6.1% gain to 219.96. On Friday, shares reclaimed the 200-day moving average, but have struggled to hold that support.
Tesla stock ranks sixth in the 35-stock IBD automaker industry group. The S&P 500 component has an 85 Composite Rating out of a best-possible 99. Tesla stock also has an 87 Relative Strength Rating and an 88 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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