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

Tesla (TSLA) Chief Executive Elon Musk signaled 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.

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Musk met with India’s Prime Minister Narendra Modi Tuesday in New York City and afterward 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 edged up 0.4% early 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.

Courting Musk

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.

Reuters 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 have 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 defense platforms and technology.

Cathie Wood Unloads TSLA Shares

Meanwhile, for the second straight session Tuesday, Cathie Wood and her Ark Invest firm sold off a portion of their Tesla stock holdings.

Cathie Wood’s Ark Investment Management sold 31,589 TSLA shares for around $8.67 million Tuesday, based on the closing price of 274.45. The Tesla sell-off was done through ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW) and ARK Autonomous Technology & Robotics ETF (ARKQ). As of Wednesday, TSLA is the top holding of those three funds.

On Friday, Wood sold 73,113 shares for about $19 million. Cathie Wood bought up Tesla on the cheap throughout 2023 but has been selling in June.

On June 12, Wood sold more than 393,000 shares of Tesla for around $98.2 million, based on TSLA’s closing price of 249.83. Cathie Wood’s funds purchased more than 1.3 million TSLA shares so far in 2023 and have now sold around 760,000 shares.

Tesla Stock

TSLA has 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 153% in 2023. However, Tesla stock is down around 34% from the all-time high 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 around 39% 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.

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

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