Tesla Stock Downgraded; Elon Musk Hints At India Tesla Manufacturing Plant

Tesla Chief Executive Elon Musk signalled Tuesday evening the global EV giant will likely make a sizable investment in India in the near future. Meanwhile, TSLA received a downgrade as margins and demand concerns continue.

Musk met with India’s Prime Minister Narendra Modi Tuesday in New York City and afterwards hinted to members of the press it’s “quite likely” Tesla will soon have a presence in the country. “We don’t want to jump the gun on an announcement but it’s quite likely that there will be a significant investment and relationship with India in the future,” Musk said Tuesday. The Tesla CEO added he plans to visit India next year.

Tesla stock slumped 5.4% to 259.51 Wednesday during market trade. On Tuesday, shares jumped 5.3% to 274.31. In addition, Barclays analyst Dan Levy downgraded Tesla stock to equal weight, down from overweight Wednesday morning. Levy also hiked the firm’s TSLA price target to 260, up from the previous 220.

The Barclays analyst wrote the stock’s recent rally has been “too sharp relative to challenging near-term fundamentals.” Levy told investors questions about margins and demand for Tesla vehicles remain concerns. 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 Italy’s Prime Minister Giorgia Meloni.

It was reported earlier this month that TSLA was in talks to make an “automotive investment,” possibly a vehicle plant, in Valencia, Spain. Other reports circulated in June said Tesla had agreed in principle with a plan to set up a manufacturing plant in India. Neither Tesla nor Musk has committed to firm plans for a new manufacturing facility in Europe or India.

India’s rising importance as a U.S. geopolitical partner is being highlighted by Modi’s diplomatic visit to Washington, D.C., on Wednesday. In his first visit to the U.S. since 2019, Modi will address Congress and attend a state dinner at the White House. The Washington Post reports President Joe Biden and Modi will discuss China and will announce new partnerships on defence platforms and technology.

Before Wednesday’s trade, TSLA advanced more than 34% in June. Last week, TSLA jumped more than 6% despite two straight consecutive sessions with losses. Before shares slipped last Wednesday, Tesla stock enjoyed a run of 13 straight gains. Shares are up around 140% in 2023. However, Tesla stock is down around 37% from the all-time high of 414 it hit in November 2021.

Tesla stock is well extended past a 207.79 buy point from what’s either a cup or a double-bottom base. Shares are more than 30% above their 200-day/40-week moving average. That’s the most extended they’ve been since the stock marked its peak in November 2021.

Tesla ranks third in IBD’s automaker industry group. It has a 99 Composite Rating out of 99. Tesla stock has a 92 Relative Strength Rating and its EPS Rating is 93 out of 99.



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