Shares of Tesla, a U.S. electric vehicle manufacturer, plunged more than 5% on the 3rd (local time).
Tesla closed at $572.84, down 5.33 percent from the previous day.
News that Tesla’s order volume has been cut in half in the Chinese market, which has driven Tesla’s growth, quickly dragged down stock prices.
The Information, a U.S. media specializing in tech companies, reported that orders for Tesla cars in May in the Chinese market almost halved compared to April, and investor sentiment froze sharply as major media outlets such as Reuters and Bloomberg quoted them.
According to The Information, orders for Tesla cars in April in the Chinese market were 18,000 units, but fell to 9,800 units in May.
Bloomberg analyzed that the news suggests a slowdown in sales in the Chinese market.
Reuters said, “As Tesla’s safety problems and consumer complaints grow, Chinese authorities have taken a tough stance on Tesla and sales of cars have decreased,” diagnosing that a series of unfavorable factors from China are holding Tesla back.
Tesla’s Shanghai plant has about 500,000 electric vehicles per year. It is an outpost that is responsible for exports to Europe as well as India and other Asian regions.
Therefore, the fact that Tesla’s orders in the Chinese market have halved has further raised concerns that Tesla’s steep growth wings may now be dampened, and investor sentiment has plummeted.
Tesla shares remained at the $600 mark until the morning, but fell vertically to the $570 mark in the afternoon.
Tesla shares fell for the fourth consecutive day since May 28, the last trading day last week.
It fell 35 percent compared to the January 26 closing price of $833.09, the highest this year.
Tesla, which boasted state-of-the-art technology in the electric vehicle industry, announced three recalls for two days due to basic component defects, fueling concerns over safety issues and further fueling the fall in stock prices.
Tesla announced on the 2nd that it will recall nearly 6,000 Model 3 and Model Y vehicles due to poor bolt tightening and that it will carry out two more recalls due to seat belt problems.
According to the National Highway Traffic Safety Administration (NHTSA), the additional recall size is 7,696 units, including 2018-2020 Model 3 and 2019-2021 Model Y 5,530 units, 2019-2021 Model Y Crossover 2,166 units.
Tesla said in a recall confirmation submitted to the authorities that it failed to check whether the seat belt was installed properly during the manufacturing process, adding that “the seat belt system could not work as designed, which could increase the risk of injury.”