Tesla stock and the YieldMax TSLA Option Income Strategy ETF (TSLY) could come under pressure after a series of related news in the electric vehicle (EV) industry. TSLA was trading at $333, down by over 30% from its highest point this year. TSLY has slumped by 26%.
Tesla India sales have faltered
The Tesla stock price could come under pressure after a disappointing report on its Indian business. Data shows that the company’s sales in India totalled at just 600 since its launch in the country in July.
The company now plans to ship between 350 and 650 vehicles to India this year, which is significantly lower than the analysts’ expectations. It is also much lower than the 2,500-vehicle quota it was given.
The main reason for this is that high tariffs have made the vehicles highly expensive in India. An entry-level model in India costs about INR 6 million or $68,000, much higher than the average INR 2.2 million where most EV sales happen. This makes its vehicles highly expensive to most Indians.
The challenges in India comes as its business is facing more issues in its core markets. Intense competition in China has led to sluggish growth there. Just last week, Byd, a key player in the automobile industry, announced lackluster numbers in which it blamed on irrational marketing tactics.
The United States market is also facing major headwinds after the Big Beautiful Bill ended the popular $7,500 incentive for EV buyers. As such, analysts anticipate weaker sales in the coming months.
Read more: Tesla sales in Europe fall 40% as BYD registrations surge 225%
This, in turn, will lead to weaker sales and profitability as it did in the second quarter. The average estimate among analysts is that its sales will be $24.9 billion in the third quarter, down by 0.80% from the same period last year. Its fourth-quarter revenue is also expected to come in at $25.5 billion, down by 80 basis point from the same period last year.
This, therefore, leads to the company’s valuation, which remains much higher than that of other companies. It has a trailing P/E ratio of 198 and a forward multiple of 178, which is hard to justify.
Worse, the company and other EV companies are facing another challenge. Trump has changed the EV credit business, where other companies pay Tesla to offset their carbon emissions.
In a recent statement, Rivian, a top EV company, said that the new changes could hit its revenue by over $1 billion, meaning that Tesla’s hit will be much higher. This is notable since this is the only part of Tesla’s business.
Most notably, it is still too early to predict whether the company’s robotaxi business will generate substantial growth over time.
Tesla stock price technical analysis
The daily timeframe chart shows that the TSLA stock price has risen from a low of $216 in April to the current $335. It has remained above the ascending trendline, which connects the lowest swings since April.
Tesla stock also remains above the 50-day moving average, a positive sign. However, it has found substantial resistance at the descending trendline that connects the highest level since May.
Therefore, this pattern means that the stock is about to make a big move in the coming days. A break below the ascending trendline will point to more downside to the support at $300.
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