Tesla (TSLA -2.23%) stock has been in recovery mode lately. After a months-long decline to start the year, shares have soared more than 40% in the last month. Much of that rebound came after CEO Elon Musk told analysts that he planned to spend more time at the electric vehicle (EV) maker and less in his role in Washington, D.C.
The stock is slumping today, however, as many investors shift their focus to the EV business itself. And the numbers don’t look promising. Shares dipped as much as almost 5% Monday morning and remained lower by 3.3% as of 11:35 a.m. ET.
Image source: Tesla.
Tesla sales aren’t rebounding
All eyes are now on Tesla’s EV sales data, especially from China. Tesla delivered 13% fewer EVs in the first quarter, but those bullish on the stock pointed to a good reason for that decline. Telsa was finishing a refresh of its bestselling Model Y, which many investors believed would spur a sales push once completed. China is one key market for investors to watch.
Yet the second quarter hasn’t started well for Tesla sales in the largest global EV market. Registration data followed by Wall Street analysts showed Chinese sales plunged about 26% in April and the first half of May, Barron’s reported over the weekend. That represents a sharp decline from the roughly flat China sales in the first quarter.
The latest data should be released soon by the China Passenger Car Association (CPCA), and investors may be selling the stock in anticipation of more bad sales results. With sales plummeting in many European markets, the China market is becoming even more critical for Tesla.
If the next report from the CPCA doesn’t show a major turnaround, it’s possible Tesla stock will continue the decline that began today.