Further troubles emerge in the electric vehicle market. Tesla (NASDAQ:TSLA) cutting prices proved to have some impact, and its work to expand its battery-making operations could be helpful. However, there are signs that demand is slowing in China, and capacity may be starting to wane. The possibility for gain and loss is almost even, and investors are, well, skittish. Tesla is down, but only fractionally, in Tuesday afternoon’s trading.
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The mixed bag of news for Tesla starts with Tesla’s Chinese sales. Sales overall rose last week, good news in any shop. However, the pace of the rise is starting to trail off, which suggests that we may not see sales continue to rise much longer. One analyst, Automotive Foresight’s Yale Zhang, noted that Tesla’s product line is “aging” and thus can’t draw attention like it once did. Moreover, Tesla’s Chinese competition moves rapidly to improve with things like extra luxury options and better navigation systems.
Meanwhile, Tesla’s move into the battery sector represents both a potential new revenue stream and a potential new trouble spot. Tesla’s association with batteries has been going on for years, and recent moves saw Tesla secure new supplies of lithium and other minerals for battery construction. However, with car sales in decline, it’s easy to wonder if backup power options will be enough to ensure demand for Tesla batteries without Tesla cars to chip in.
Tesla, however, enjoys substantial analyst support. Currently, analyst consensus calls Tesla stock a Moderate Buy based on 22 Buys, six Holds, and three Sells assigned in the past 12 months.