Tesla Stock Taps On Brakes As China EV Registrations Fall 15%

Tesla (TSLA) insurance registrations in China fell for the second consecutive week, as the global EV giant’s top competitors in China are ramping up deliveries. TSLA stock dropped Tuesday, with recent Tesla crashes and a possible lithium deal also in focus.

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Tesla had 5,913 insurance registrations for the week of Feb. 13-19, down 15% from 6,963 registrations in the prior week as well as 8,643 in the week before that. Slowing China EV registrations could signal demand is waning after an initial pop following big price cuts on Jan. 6. But Tesla Shanghai exports to Europe and elsewhere may be limiting EVs for local delivery.

Of the Feb. 13-19 insurance registrations, 1,579 were Tesla Model 3 vehicles while there were 4,334 registered Tesla Model Y vehicles according to CnEVPost.

Meanwhile, most other China EV makers are continuing to see higher registrations as production and demand ramp up following China New Year.

Tesla competitor BYD (BYDDF) had 37,026 total insurance registrations, up 18% compared to the week prior. China-EV startups Li Auto (LI) registrations climbed 4% to 4,238, Nio (NIO) registrations also advanced 4% to 3,174 and XPeng (XPEV) grew 5% to 1,463.

Last week, Bloomberg reported Tesla would pause some output at its Shanghai plant starting Feb. 19 to retool production lines for a Model 3 upgrade coming later this year. This would be the third shutdown of the Shanghai plant in less than two months.

Tesla upgraded production lines in stages over the past two months, with deliveries of the new Model 3 sedan expected to begin later this year, according to Bloomberg. The global EV giant has not confirmed reports of a new Model 3.

Tesla planned to produce an average of nearly 20,000 vehicles a week at its Shanghai plant in February and March, according to Reuters, citing sources, but it’s not clear that happened.

Last year, Tesla Shanghai upgrades affected output in July and early August.

Tesla Stock

Tesla stock sank 3.7% to 200.50 in Tuesday’s market trade. Shares surged again last week, rising nearly 6% to 203.35. Tesla stock has more than doubled from the bear-market low of 101.81 on Jan. 6.

Tesla Crashes

Meanwhile, China state media over the weekend noted renewed Tesla safety concerns by consumers after an out-of-control Model 3 crashed in Wenzhou on Friday, killing a passenger.

On Saturday, a Tesla driver died in California as the vehicle slammed into a stationary fire truck in California.

The National Highway Traffic Safety Administration requested more information about that crash. The NHTSA has been probing Tesla Autopilot crashes into stationary emergency vehicles since late 2021.

On Thursday, NHTSA announced a Tesla recall of more than 362,000 vehicles for Full Self-Driving software safety flaws.

Elon Musk Eyes Lithium Play

The world’s leading EV maker is also reportedly mulling a possible bid for Sigma Lithium (SGML), according to Bloomberg Friday night. Sigma Lithium has no sales, but is poised to start commercial production at its Brazil site in April.

SGML shares soared 15% early Tuesday. Albemarle (ALB) and Sociedad Quimica (SQM) both edged down around 2%.

If Tesla does buy Sigma, the deal would follow General Motors (GM) taking a stake in Lithium Americas (LAC).

TSLA shares rank fourth in IBD’s Auto Manufacturers industry group. Tesla stock has a 71 Composite Rating out of 99. The stock also has a 28 Relative Strength Rating. The EPS Rating is 99.

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

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