Tesla's Stock Goes Reverse Turbo Premarket: What's Going On?

Shares of electric vehicle manufacturer Tesla, Inc. TSLA experienced a premarket decline on Monday following the company’s announcement of another price reduction.

Tesla lowered the starting prices for both the Model Y Long Range and Performance variants by RMB 14,000 (approximately $1,930), as stated in a Weibo post. The base model of the Model Y standard version retained its price. Additionally, the company introduced a time-limited insurance subsidy of RMB 8,000 for inventory Model 3 rear-wheel drive vehicles, effective from Monday.

Since the second-quarter earnings report on July 19, Tesla’s stock has been under pressure, attributed mainly to uncertainty surrounding its margin prospects.

Commenting on this, Gary Black of Future Fund shared on social media platform X (previously Twitter) that without counterbalancing cost reductions, the impact on annualized earnings per share would amount to $0.35 per share.

Black pointed out that the Model Y’s standard range represents 82% of Tesla’s sales in China, with the Long Range and Performance versions constituting 14% and 4%, respectively.

In pre-market activity on Monday, Tesla’s stock dipped by 2.23% to $237.25, based on Benzinga Pro data. Notably, the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 Index, registered a 0.20% increase during the same period.

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See Also: Everything You Need To Know About Tesla Stock