Tesla Stock Hits YTD Lows Ahead of Earnings. What’s Happening?

Tesla (Nasdaq: TSLA) stock price declined further on Monday, as investors reacted to news of the company’s move to cut prices on its leading models. The move affects Model X, Model Y and Model S, with the company shaving off $2,000 from their initial price tags. The price changes affect markets in Africa, Europe and the Middle East. Tesla stock hit a new YTD low of $138.80 before reversing slightly to trade at $141.55 in Monday’s intraday trading.

 At its current price, the company has lost 44% of its value since the year began. The company’s CEO, Elon Musk, announced that the company was keen on aligning production with demand, hence the decision. The move comes as no surprise as Tesla passes through one of its most trying periods in the face of rising competition from Chinese manufacturers amidst reduced sales figures.

Furthermore, the prevailing high interest rates have deterred borrowing, reducing many consumers’ ability to purchase the relatively high-end EVs. The last week, in particular has been riddled with a series of unpleasant news from Tesla-the company first announced that it would lay off 10% of its workers, then followed up with a high-impact recall of 3,878 units of its iconic Cybertruck.

Earlier this month, the company reported its first quarterly decline in sales in nearly four years. The company sold 386,810 vehicles, representing a decline of 8.5% from the previous quarter. Tesla produced 433,371 vehicles during that period. That the company registered the first decline in sales since the Covid-19 era underlines the struggles of the American carmaker, as Chinese companies like BYD, Xiaomi, Xpeng, Li Auto and Nio offer cheaper alternatives. Tesla earnings report will be out on Tuesday, April 23rd, and that will likely bring fresh volatility into the TSLA stock price.

Technical analysis

Tesla stock price faces resistance at 144.65, with support at 138.85. If resistance persists, the sellers will could extend their control to build momentum to breach the first support and potentially head lower to test 135.99. Alternatively, a move above the 144.65 pivot mark will favour the buyers to take control, with the next resistance at 147.70. A continuation of control by the buyers will likely break the resistance, thus invalidating the downward narrative and potentially test 151.93.