Tesla headwinds include a sales deceleration in China and price cuts in the U.S.
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Tesla (NASDAQ:TSLA) will begin trading during the new week with fresh data out of China showing a recent drop in sales growth for the automaker.
The China Passenger Car Association reported that Tesla (TSLA) sold 74,073 China-made electric vehicles in September. The monthly tally was down 10.9% from the sales generated during September a year ago and were 12.0% lower than the China-made sales reported for August.
Looking at the U.S., Bank of America thinks Tesla's (TSLA) latest price cuts on the Model 3 and Model Y further heighten demand concerns. On October 6, Tesla (TSLA) reduced U.S. pricing on its Model 3 and Model Y vehicles by $1,250 and $2,000, respectively. The Austin-based automaker has been adjusting prices across its different vehicles based on market conditions, which has raised some investor concerns on whether demand for Tesla (TSLA) vehicles is fading.
BofA estimated Q3 pricing on the Model 3 is down 14% from a year ago and down 1% from Q2 of this year, while Q3 pricing on the Model Y is down 23.5% from a year ago and down 1% from Q2.
For its part, Tesla (TSLA) has stated in the past that a broad goal is to prioritize volume over pricing and near-term profits, which could also explain the aggressive price actions over the last year.
"Ultimately, TSLA has noted that its intention is to realize greater profit from post-sale products such as Full Self Driving," noted BofA on the long-term Tesla (TSLA) plan.
The firm reiterated a Neutral rating on Tesla (TSLA), viewing the company as a trailblazer in the electric vehicle market, but pointing to a number of hurdles including uncertainty in the broader macro environment, risks to EV demand, and growing competition that could persist at least in the near-term.
Shares of Tesla (TSLA) are up 141% on a year-to-date basis.

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