Tesla (NASDAQ:TSLA) is in trouble. It is down $80 a share (40%) in the past month and a half and $260 a share (67%) since making a high last April. And it’s becoming increasingly clear that China — the very market that the company once appeared dependent on for survival — may ultimately spell even more trouble for Elon Musk in the weeks and months to come.
In October, Morgan Stanley analysts said that Tesla Motors is so dependent on the Chinese market that it is essentially a Chinese tech stock. “We estimate Tesla generates as much as one-half of its profitability from the Chinese market,” they remarked, “arguably making the stock a derivative of a Chinese tech stock.” That’s a problem when considering Musk’s sales in China continue to plummet, and Musk’s business ties to China continue to incite congressional movement.
