Tesla (TSLA) stock crash on new data from China: here’s what’s happening
Tesla’s (TSLA) stock crashed by as much as 4% in pre-market trading on new data coming from China.
Let’s dive into what’s happening.
Insurance registration numbers were released in China last night, indicating that Tesla sold about 15,300 vehicles in the world’s biggest EV market last week.
Tesla currently sits at about 98,800 vehicles in China in the first quarter – about 4,000 fewer vehicles than during the same period in Q1 2024.
Globally, Tesla delivered 387,000 vehicles in Q1 2024 – yet, Wall Street analysts still expect Tesla to deliver 406,000 vehicles in Q1 2025.
Based on the recent ramp-up in deliveries over the last few weeks, from ~7,000 units 4 weeks ago to now ~15,000 units, it looks like Tesla was able to ramp up production of the new Model Y fairly well at Gigafactory Shanghai.
However, the problem is demand.
Yesterday, we reported that Tesla did two things:
- Tesla started to offer 0% financing on the new Model Y RWD in China
- Tesla increased the price of the Model Y AWD by RMB 10,000 yuan ($1,380 USD)
While some focus on the price increase as a good sign of demand, it’s based on a misunderstanding of Tesla’s market in China.
Tesla’s sales mix in China is roughly 90% RWD to 10% AWD.
Therefore, Tesla planned limited production of the new Long Range AWD based on the historical mix, and it got slightly more orders, resulting in a new order delivery timeline of 6 to 10 weeks.
Tesla now takes advantage of that by squeezing another $1,000 from buyers.
However, the real headline here is that Tesla’s lifeblood in China, the Model Y RWD, is seeing very weak demand on higher production, with a new delivery timeline of just 2-4 weeks.
Tesla already had to reintroduce 0% financing just a few weeks after launching the new version of the Model Y and enjoying a few weeks of extra demand for the redesign.
In addition to Tesla’s own reality in China, the automaker is also facing increasing pressure from competition. BYD just unveiled its latest ‘Super-E’ platform, which enables record-fast charging.
Today, CATL, Tesla’s main battery supplier in China, announced a new partnership with NIO, a Tesla competitor.
Also today, ZEEKR, another Tesla competitor in China, announced its own advanced driver-assist system for free as Tesla is launching its Full Self-Driving (FSD) system in the market.
More electric vehicles are also being announced in the market every week – putting more pressure on Tesla in the already most competitive EV market in the world.
Electrek’s Take
In short, China is the most critical EV market, and Tesla is being squeezed out of it.
Tesla’s margins in China are already believed to have gone to 0% late last year. It really doesn’t look like it can get better this quarter or this year.
Most people also didn’t expect Tesla to have to reintroduce 0% financing on the new Model Y so quickly in China. Thanks to the excitement for the new Model Y, they believed that Tesla would enjoy at least a few more months of unsubsidized demand.
It looks like the few months were actually just a few weeks.
Personally, I think thought that the Model 3 refresh was better executed than the new Model Y.
Tesla appears to have tailored the redesign to the Chinese market, which might work in North America, but in China, Chinese buyers might as well buy the cheaper and better-equipped Chinese vehicles that Tesla is trying to copy.
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Shares of USA Rare Earth jumped in extended trading Thursday, after CEO Barbara Humpton told CNBC that the rare earth miner is “in close communication” with the White House.
Humpton’s comment comes after the Trump administration took a 5% equity stake in Lithium Americas this week. The Defense Department took a 15% stake in rare earth miner MP Materials in July.
“We are in close communication with the administration,” Humpton told CNBC’s Morgan Brennan when asked whether USA Rare Earth was interested in a deal with the Trump administration.
USA Rare Earth stock year to date.
USA Rare Earth shares were last up about 8% after hours. Its stock gained 23% in regular trading Thursday and has nearly doubled this year.
“This is a field where it will not be a zero sum game,” Humpton said of the rare earth supply chain. “It’s going to take a lot of players to build out this marketplace.”
USA Rare Earth is developing a mine in Sierra Blanca, Texas, and a magnet production facility in Stillwater, Oklahoma. Humpton said she supports the Trump administration’s deals with MP and Lithium Americas.
“What we’re doing is keeping the administration informed of our own plans,” she said.
The adminstration has said it is making the investments to help support the industry and break U.S. dependence on China.
Environment
Tesla applies for patent to make Cybertruck look even more ridiculous but more efficient
Tesla has applied for a new patent that would make the Cybertruck look even more ridiculous than it already does, but it would also make towing more efficient.
The Cybertruck is one of, if not the most, polarizing vehicles of all time, and its design is primarily to blame.
Much of the design is due to the use of stainless steel panels and the attempt to make pickup trucks more aerodynamically efficient.
Tesla has managed to improve on the drag coefficient of the average pickup truck.
However, it doesn’t help much with towing a trailer, which is going to catch a lot of that drag.
Tesla has now applied for a new patent on a device that would help push wind over a trailer towed by the Cybertruck.
The American automaker wrote in the abstract of the patent application:
An inflatable aerodynamic deflector to reduce drag and enhance efficiency. Constructed from drop stitch material, it forms one or more air chambers between parallel skins. The component includes a pressure regulation mechanism and diverse attachment interfaces such as rail systems, magnetic fasteners, and quick disconnect clips, distributed along the vehicle for secure mounting. This component acts as an aerodynamic deflector, optimizing airflow around conveyances, especially combination vehicles like tow vehicles and trailers.
In short, Tesla is working on an inflatable device that could sit on the bed of the Cybertruck and rise to close the air gap between the truck, thereby extending the angle of the windshield over the trailer.
Here are some of the drawings from the patent application
Electrek’s Take
To be fair, companies often apply for patents on products that they don’t have concrete plans to bring to production, and this could easily be the case here.
That’s especially true for the Cybertruck.
The program is so much smaller than Tesla anticipated, and with smaller volumes, it makes less sense to launch accessories.
That said, I’m pro everything that makes driving more efficient, regardless of whether it makes a vehicle silly.
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The 2026 Hyundai Kona Electric lineup will be offered in a single trim, but at least it’s the most affordable one.
Here’s the new 2026 Hyundai Kona Electric lineup
With the IONIQ 5 stealing the spotlight, Hyundai is downsizing the 2026 Kona Electric to just one trim — the base SE model.
Hyundai didn’t provide prices, but the 2025 Hyundai Kona Electric SE was the brand’s most affordable EV, starting at just $32,975. The SEL, Limited, and N Line trims will not be offered for the 2026 model year.
In another blow, Hyundai is also dropping the Long Range battery, meaning the 2026 Kona Electric will only be available with the Standard Range battery.
The Long Range 64.8 kWh battery offers a driving range of up to 261 miles, while the Standard Range 48.6 kWh battery delivers a driving range of just 200 miles. The only other change is that the SE trim will now include a larger console tray.
With new models arriving, like the 2026 Nissan LEAF and the 2027 Chevy Bolt EV, the Kona Electric will no longer be one of the few EVs starting under $35,000.
Nissan claims the 2026 LEAF “has the lowest starting MSRP for any new EV currently on sale in the US” at just $29,990. The new LEAF also offers significantly more range, with over 300 miles, and features a NACS port for recharging at Tesla Superchargers.
While it’s cutting the Kona Electric lineup, Hyundai appears to be focused on its top-selling EV for 2026, the IONIQ 5.
Following the expiration of the federal EV tax credit, Hyundai reduced prices on the 2026 IONIQ 5 by up to nearly $10,000 on certain trims. The 2026 IONIQ 5 now starts at just $35,000. It’s also extending the $7,500 credit for 2025 models.
Is the Kona Electric on its way out with the IONIQ 5 now available for about the same price? Either that, or Hyundai will have to cut prices on the Kona EV to stay competitive.
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