Why Tesla Stock Is Pulling Back Premarket Today

Tesla, Inc. TSLA shares fell in premarket trading on Monday, reflecting the negative momentum since the electric vehicle company released its first-quarter deliveries report.

Tesla updated the pricing of its vehicles on its U.S. website last Thursday, announcing mid-single-digit percentage cuts for its Model Y, S, and X vehicles. The company also reduced the price of its two variants of the Model 3 vehicles sold in the U.S. by $1,000. However, the company indicated that the rear-wheel drive Model 3 vehicle could only benefit from half of the $7,500 EV subsidy. In addition, Tesla added a cheaper variant of Model Y to the vehicles marketed in the U.S., which would use Tesla’s in-house 4680 cells.

See Also: Everything You Need to Know About Tesla Stock

However, the negative reaction could be due to concerns that the price cuts announced so far may not be enough to boost demand. Investors are also likely worried about the margin impact.

Tesla's fourth-quarter results, due on April 19, could shed more light on this. The company has already hinted at the automotive margin dropping toward 20%.

Tesla on Monday said it had signed an agreement to set up a second factory site in Shanghai focused on manufacturing Megapacks. Reports suggested that CEO Elon Musk would likely travel to China in the coming weekend and stop at the existing Giga Shanghai plant.

A proxy statement filed by the company in connection with its annual shareholder meeting provided new details, including the elevation of Tom Zhu as SVP of the automotive business, a cut in the amount of loan Musk can take against the Tesla stock he holds, and the nomination of Tesla co-founder J.B. Straubel to the board.

In premarket trading on Monday, Tesla stock fell 1.76% to $181.81, according to Benzinga Pro data.

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