Tesla Inc. shares opened lower on Monday as concerns about a price war in oil spur a crash in crude prices and the coronavirus outbreak weighs heavily on car sales in China.
Shares of the electric-vehicle maker fell as much as 14% to $605 in New York before a wider sell-off prompted a market-wide trading halt. The shares last traded at these levels in late January. The stock had risen to about $917 in mid-February, just before a broader meltdown hit the markets amid the intensifying virus risks.
Dwindling oil prices, triggered by the breakup of the OPEC+ alliance, spells trouble for Tesla. With both Russia and Saudi Arabia flooding the market with cheap oil, the company’s expensive battery-driven vehicles will become a tougher sell.
The slowdown in China is another major challenge, given a big part of the company’s growth trajectory is dependent on that country, which is one of the major global markets for electric cars.
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