Tesla falls most since July as three-day slide deepens

Shares of electric car maker Tesla showed their steepest decline since July in trading today, November 13, and slipped back into negative territory in year-to-date terms. At the same time, the stock was among the three most actively traded. According to MarketWatch, the electric car maker has come under pressure in recent days from several negative headlines, including share sales by Cathie Wood’s funds, a Powerwall battery recall, and a decline in electric car sales in China. The stock has also been affected by a broad selloff in the tech sector.

Today's 6.6% decline to $401.99 per share was Tesla’s steepest since July 24, when the stock fell 8.2% after the company’s second-quarter earnings report, MarketWatch writes. During the call, CEO Elon Musk told investors at least nine times that coming quarters would be "rough." The stock later regained ground, but the past three sessions erased almost 10% – the worst three-day stretch since June, MarketWatch added.

Tesla finished the session today among the 10 weakest stocks in the S&P 500 and the second-worst performer in the Nasdaq 100, according to Dow Jones Market Data. Despite the selloff, Tesla was again one of the most traded names in both indexes.

The stock is now down 0.5% year to date, which makes Tesla the only member of the Magnificent Seven in negative territory this year. Shares briefly moved into the black for the year in September, after Musk bought $1 billion of stock.

Tesla has been dealing with several negative headlines. Key executives overseeing the Cybertruck, Model 3, and Model Y programs have left the company, the Associated Press reported on Monday, November 10.

MarketWatch writes that Ark Investment Management’s Cathie Wood, long one of Tesla’s most vocal supporters, has reduced her funds' allocation to Tesla in the last several trading sessions. The Investor’s Business Daily notes that the ARK Next Generation Internet and ARK Innovation ETFs sold more than 70,000 Tesla shares yesterday, November 12. Even with the sales, Tesla remains the largest holding in these tech funds.

Tesla is also struggling in China, the world’s largest electric car market. From January through October, sales of China-made Tesla vehicles reached 667,861 – a decline of 10% year over year, according to data from the China Passenger Car Association.

Today, Tesla said it is recalling about 10,500 Powerwall 2 home backup battery systems after customers reported overheating incidents, including five cases involving fire. The affected units were sold between November 2020 and December 2022. A similar recall took place in September in Australia involving batteries with lithium-ion cells from a third-party supplier.

Barron’s writes that the latest decline reflects broader market weakness as well. The main U.S. stock indexes recorded their sharpest drop in a month today.

MarketWatch data shows that of the 52 analysts covering Tesla, 22 recommend “buy,” 18 “hold,” and 11 “sell.” The Wall Street consensus target price is almost $400 per share, which is 0.5% below the November 13 closing price.