Tesla had one of the best months in almost 2 years after reporting a strong Q3 earnings with strong future guidance in October and rose 42% after the 2024 U.S. elections driven by positive investor sentiment despite concerns over federal electric vehicle credits.
Tesla stock fell 5.8% on Thursday November 15 as some of the stock’s post-election gains faded amid a cooling of the Trump trade and a new report from Reuters that suggested EV tax credits could be cut under the incoming Trump administration.
Trump’s team has drawn up plans to eliminate the $7,500 tax credit for electric vehicle buyers as part of a broader tax reform. Eliminating the EV credit would logically benefit gas-powered cars, which would hurt Tesla’s sales to established automakers or cause potential EV consumers to continue with their present car.
The company this week also announced its sixth recall for the Cybertruck this year, recalling 2,400 pickups due to a faulty part that could lead to a loss of power and increase the risk of a collision.
Tesla wasn’t the only EV stock to fall on the news. Rivian Automotive and Lucid Group got hit even harder as both stocks are deeply unprofitable and more urgently need help to sell vehicles than Tesla, which is solidly profitable.
Tesla CEO Elon Musk said earlier in the year that ending the subsidy might slightly hurt Tesla’s sales, though it would be worse for its U.S. EV competitors like Rivian and Lucid.
However, Musk has also complained about the impact of high interest rates on Tesla’s business, essentially saying that consumers are price-sensitive and that it’s hard for the company to compete on price since its vehicles are more expensive than gas-powered alternatives.
Technical Analysis
Source: TradingView
Price broke out of its range October 23 at $212 and has surged by forming higher lows and higher highs, going past the pivot line and breaching its previous technical level at $262 and formed a top at $358.
Price pulled back after profit was taken at its new high. RSI shows that it went past the 70 level showing overbought conditions which formed a bearish divergence and might add bearish pressure to the price and might cause the price to fall and form a new support which formerly was a resistance line at $278.
If buyers were to retake control of the pullback, they might cause the price to rally and continue to form new highs.
Overall, the price is still in a strong bullish market.
