Tesla Stock Eyes Breakout After U.S. Luxury Model Price Cuts

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Tesla (TSLA) slashed U.S. vehicle pricing once again Sunday evening, the latest sign demand for Tesla vehicles may be waning after an initial boost came from January price cuts. TSLA shares edged lower Monday.

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The move by the global EV giant to further drive down U.S. prices on its luxury models follows recent European price cuts of around 6% on inventory Model 3 and Model Y vehicles. On Tuesday, weekly China EV insurance registration data could be an important gauge for Tesla demand in the world’s largest EV market, which is in the midst of a huge price war started by Tesla.

Tesla on Sunday dropped the price for a Model S by $5,000, bringing the basic version to $89,990. Meanwhile, the cost of a Model X SUV decreased by $10,000, bringing a basic version to $99,990, according to pricing on Tesla’s website.

Tesla stock dropped 1.2% to around above 195.25  Monday during market trade.

The EV giant slashed Model S Tri-Motor Plaid trim prices by $5,000 and reduced the Model X Tri-Motor Plaid price by $10,000. The vehicle trims are now both priced at $109,990.

Tesla’s base luxury trim models are now priced below offerings from Lucid Group (LCID). The U.S. luxury EV startup’s base Air Touring sedan vehicle starts at $107,400. Lucid shares climbed 0.6% early Monday.

Tesla’s latest price cuts follow similar moves in January, when the company reduced prices for its Model 3 and Model Y vehicles. After those reductions, CEO Elon Musk claimed Tesla saw “the strongest orders year-to-date than ever in our history.”

Tesla Stock

TSLA shares fell below its 21-day moving average for the first time in weeks on Thursday. However, Tesla stock rebounded Friday, closing up 3.6% to 197.79. On the week, Tesla stock rose 0.5%.

TSLA shares have paused below the 200-day moving average after a huge run to start the year. Aggressive investors could use 217.75 as a buy point, according to MarketSmith analysis. However, to be safe, Tesla stock should clear the 200-day line, which is now below 221.

Jefferies on Monday raised the firm’s price target on Tesla stock to 230, up from 180. The firm maintained a “Buy” rating on TSLA shares. Jefferies analyst Philippe Houchois wrote a lack of new product announcements during Tesla’s investor day does not imply major growth delays.

Tesla stock ranks fifth in IBD’s Auto Manufacturers industry group. The group itself ranks No. 66 out of the 197 industry groups tracked by IBD.

Tesla stock has a 69 Composite Rating out of 99. The stock also has a 20 Relative Strength Rating. The EPS Rating is 99.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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