Tesla stock downgrade; Elon Musk hints at Tesla’s manufacturing plant in India

You’re here (TSLA) Chief Executive Elon Musk announced late Tuesday that the global electric vehicle giant is likely to make a significant investment in India in the near future. Meanwhile, TSLA has been downgraded as margins and demand issues persist.


Musk met with Indian Prime Minister Narendra Modi in New York on Tuesday and then hinted to members of the press that it’s “very likely” that Tesla will soon have a presence in the country.

“We don’t want to rush into an announcement, but it’s highly likely that there will be significant investment and relationship going forward,” Musk said Tuesday.

The Tesla CEO added that he plans to visit India next year.

Tesla stock edged up 0.3% on Wednesday in premarket trading. On Tuesday, shares jumped 5.3% to 274.31.

Additionally, Barclays analyst Dan Levy downgraded Tesla stock to equal weight, down from Wednesday morning’s overweight position. Levy also raised the company’s TSLA price target to 260 from 220 previously.

The Barclays analyst wrote that the stock’s recent rally has been “too strong compared to the difficult near-term fundamentals”. Levy told investors that questions about margins and demand for Tesla vehicles remain a concern.

Courting Musk

Musk and Modi held their meeting as several countries jockey for new Tesla manufacturing plants.

Last week, Musk met with French President Emmanuel Macron and Italian Prime Minister Giorgia Meloni.

Reuters reported earlier this month that TSLA was in talks to make an “automotive investment”, possibly a vehicle factory, in Valencia, Spain. Other reports released in June said Tesla had agreed in principle to a plan to set up a manufacturing plant in India.

Neither Tesla nor Musk have committed to firm plans for a new manufacturing plant in Europe or India.

India’s growing importance as a geopolitical partner to the United States is underscored by Modi’s diplomatic visit to Washington, DC on Wednesday. In his first visit to the United States since 2019, Modi will address Congress and attend a state dinner at the White House.

The Washington Post reports that President Joe Biden and Modi will discuss China and announce new partnerships on defense platforms and technology.

Cathie Wood dumps TSLA shares

Meanwhile, for the second straight session on Tuesday, Cathie Wood and her company Ark Invest sold some of their Tesla shares.

Cathie Wood’s Ark Investment Management sold 31,589 TSLA shares for about $8.67 million on Tuesday, based on the closing price of 274.45. The sale of Tesla was made by ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW) and ARK Autonomous Technology and Robotics ETF (ARKQ).

On Friday, Wood sold 73,113 shares for about $19 million. Cathie Wood bought Tesla at low prices throughout 2023 but sold in June.

On June 12, Wood sold more than 393,000 shares of Tesla for about $98.2 million, based on TSLA’s closing price of 249.83. Cathie Wood’s funds have bought more than 1.3 million TSLA shares so far in 2023 and have now sold around 760,000 shares.

Tesla Stock

TSLA advanced more than 34% in June. Last week, TSLA jumped more than 6% despite back-to-back sessions with losses.

Before shares slipped last Wednesday, Tesla stock posted a streak of 13 straight gains. Shares are up about 153% in 2023. However, Tesla stock is down about 34% from the all-time high of 414 it hit in November 2021.

Tesla stock is well extended past a buy point of 207.79 from what is either a cup or a double-bottom base.

The shares are around 39% above their 200-day/40-week moving average. This is the longest since the stock hit its peak in November 2021.

Tesla ranks third in the IBD automaker industry group. It has a composite rating of 99 out of 99. Tesla stock has a relative strength rating of 92 and its EPS rating is 93 out of 99.

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


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