Tesla (TSLA) has recently faced a setback in its Model Y production at its Shanghai factory, with production reportedly trimmed by 20% since March according to Reuters. Despite this news, Tesla stock saw gains on Friday, as the market gave TSLA the benefit of the doubt amidst a broader market sell-off.
The production cuts at Tesla come as XPeng (XPEV) reported a 20% increase in deliveries during the first quarter, and Nio (NIO) announced a new in-house brand called Onvo. This positive news for other Chinese EV makers highlights the competitive landscape in the Chinese market.
On the policy front, US President Joe Biden recently increased tariffs on Chinese-made EVs from 25% to 100% in response to concerns about overcapacity. Tesla CEO Elon Musk has come out in opposition to these tariffs, which could potentially impact Tesla if China retaliates with trade aggression.
In terms of market trends, there are indications that EV demand growth may be waning. A recent study by J.D. Power showed a decline in the percentage of consumers who are “very likely” to purchase an EV in 2023 compared to the previous year, signaling a potential shift in consumer sentiment towards EVs in the US.
The history of EVs dates back over 100 years, but it wasn’t until the late 1990s and 2000s that advanced lithium-ion battery technology enabled the mass production of EVs. Since then, the EV market has been steadily growing, with global market share increasing from 9% of new auto sales in 2021 to 14% in 2022.
Looking ahead, the future of EVs remains uncertain, with Tesla stock facing technical challenges on the trading charts. Support levels for TSLA stock are currently at $164 and $154, and bulls will need to push the stock above the range high of $186.88 from May 21 to establish a positive technical outlook. Despite these challenges, the EV market continues to evolve and expand, driven by technological innovation and changing consumer preferences.
