Tesla Lower Pre-Market

Shares in Tesla are trading a little lower ahead of the market open on Tuesday.

The iconic company has seen a return to bearish sentiment over the last two weeks with price correcting lower from the 611.29 level. Price has seen a dramatic decline from the 886 highs registered at the start of the year.

Despite a rebound off the 550 level, Tesla shares are now turning lower once again threatening an approaching test of the bullish trend line from 2020 lows.

Image Source: Pexels

New Semi Trailer Delayed

This week, the company has been hit by news that its planned, all-electric, semi-trailer, the “Tesla Semi”, is likely going to be delayed again as a result of issues with battery development.

The trailer has incredibly high energy demands, requiring five times the level of battery power as its electric vehicles do.

At the company’s last Battery Day in September, CEO Elon Musk laid out plans to use battery cells with lower energy density. This would create lower energy demand vehicles in a bid to free up high energy density cells for its higher energy vehicles such as the Semi and the Cybertruck.

Battery Cell Issues

However, with that plan yet to be fully put in place, the company has delayed the new vehicle launch.

At Tesla’s Q4 earnings call in January, Musk said:

“It would not make sense for us to do the Semi right now, but it will absolutely make sense for us to do it as soon as we can address the cell production constraint.”

Looking ahead, Musk went on to say:

“We are too cell-constrained right now, but probably ok next year.”

Tesla Turning Lower Again

(Click on image to enlarge)

The sell-off in Tesla is raising serious questions over the near and medium-term outlook for the company.

If the current peak at 698 proves to be a lower high against the 886 highs then this could set up the market for a big push lower. This could take price down through the rising trend line from 2020 lows and down towards the 359.71 level ultimately.

The big challenge will be the 502.12 region. If buyers can defend that ledge of support, this could help keep the medium-term bullish bias intact.