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Tesla Stock News: TSLA chart signals more downside to come as Cybertruck looks sexy but unprofitable

  • TSLA stock sinks three days in a row despite Cybertruck unveiling.
  • Analysts conclude that Cybertruck will find it difficult to turn a profit.
  • TSLA stock is the midst of forming a bearish Three Black Crows pattern on the daily chart.
  • Fed Chair Powell gave a hawkish speech at Spelman College, saying interest rate cuts were not yet on agenda.

Tesla (TSLA) stock closed down 0.55% to $238.75 on Friday. This was the third day in a row on Friday that TSLA stock sold off, enacting what seems like a bearish Three Black Crows candlestick pattern, although Friday did see a rebound off a much lower open. This means that TSLA stock looks primed to drop about 10% to the $210 support level or even further to the descending bottom line of the price channel in the $180s as the market moves toward Christmas.

Tesla’s Cybertruck unveiling impressed the analysts but not the market this week. Additionally, Federal Reserve (Fed) Chair Jerome Powell poured cold water on the idea that the central bank was close to cutting interest rates.

“It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance or to speculate on when policy might ease,” Powell said in a speech at Spelman College on Friday morning. “We are prepared to tighten policy further if it becomes appropriate to do so.”

Tesla stock news

The news on the Tesla Cybertruck at Thursday’s unveiling was that though the model stands out among a sea of Detroit competitors, the Cybertruck will do little for Tesla’s bottom line. CEO Elon Musk admitted as much when he said that it would be quite a challenge and require back-breaking volume to make the model cash-flow positive. Tesla delivered just 10 units at the event.

Analysts concluded similarly but were more upbeat at the prospect of Tesla broadening its portfolio. Morgan Stanley’s Adam Jonas views the Cybertruck as Tesla first foray into building more mainstream trucks and SUVs in the latter part of the decade. The Cybertruck, which was announced back in 2019, is predicted to remain a niche product.

“By 2025, we forecast Cybertruck will account for less than 5% of Tesla revenues and closer to 0% of profit,” Jonas wrote in a client note.

With 2,500 lbs. of towing capacity, the science-fiction looking design belies the truck’s competitive vein. In a head-to-head matchup between the Cybertruck, the Ford F-350 diesel, Rivian’s R1T, and the Ford F-150 Lightning, the Cybertruck came out on top, according to Tesla.

The lowest-priced model of the Cybertruck comes in at $61,000 before tax breaks and has a battery range of 340 miles. Notably, Tesla claims to retain 2.1 million reservations for the Cybertruck, which is quite robust.

EV stocks FAQs

Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.

EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.

We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.

China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.

Tesla stock forecast

Tesla stock has lost ground for three sizable candles in a row. This pattern is referred to as Three Black Crows and typically signals a bearish reversal. That forecast is hard to argue with since TSLA is trading beneath the 100-day Simple Moving Average (SMA) and has traded within a descending price channel since mid-July.

On the downside, Tesla could find support at the $210 level, which has been an occasional consolidation waystation this year. Otherwise a drop to the lower bound of the price channel in the $180s is in order over the coming month.

TSLA daily chart

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