- Summary:
- Tesla share price is under pressure after Canada followed the US and the EU in hiking tariffs on China EVs. What does this mean?
Tesla’s share price lost further ground on Tuesday following Canadian Prime Minister Justin Trudeau’s tariff hike announcement. Tesla (NASDAQ: TSLA) closed trading down by 1.8 percent and dropped by 0.5 percent in aftermarket hours to trade at $208.10. The stock had had a torrid run in August and is down by 5.4 percent on the monthly chart. Its year-to-date figures are worse off, with losses standing at -16.4 percent as of this writing.
After pushing back the unveiling date for its Robotaxi from August 8 to October 10, Tesla share price was exposed to downward pressure, following unimpressive earnings in the second quarter of the year. That has been exacerbated by Canada’s imposition of a 100 percent tariff on electric vehicles imported from China, including Teslas.
In raising the EV tariffs, Canada follows the footsteps of the United States, which imposed a similar 100 percent rate in May, and the EU, which announced a 38 percent tariff on Made in China EVs in July. Tesla does not reveal its China EV shipments to Canada, but its Giga Shanghai factory is the world’s largest all-EV manufacturing plant.
The high taxes will make EVs more expensive and could lead to a decline in Tesla’s sales numbers. Tesla CEO has in recent months stated that the company will pay greater attention to AI-powered full self drive technology, rather than only sales numbers. Therefore, another postponement of the Robotaxi unveiling could hurt Tesla stock price in the coming weeks.
Tesla share price momentum
On the 4-hour chart below, Tesla price is seen approaching the lower Bollinger Band, signaling that the downward momentum currently prevails. A break below the corresponding share price reading of $205.82 could potentially set off a stronger downside movement. Meanwhile, the RSI is at 38.6, adding weight to the downside view.
Support and resistance levels
TSLA looks likely to continue with the downside trajectory if resistance persists at 210.64. The bearish control will likely see the establishment of the first support at 207.10. However, a break past that level could set off a stronger downward momentum to test 204.00.
Alternatively, if Tesla share price moves above 210.64, it will signal control by the buyers. In that case, the first resistance could come at 213.30. Nonetheless, a stronger push by the bulls could break past that level, invalidating the downside narrative and potentially testing 215.70.
