One of the most vulnerable US companies operating in China saw Tesla Inc.'s share price sharply down by as much as 6.3% to $ 224.50 on Monday. It was the share's lowest intraday level since January 2017.
Tesla's holding closed the day at NOK 227.01, a decrease of 5.2 per cent. It suffered further losses in the after-trade and dropped to $ 226.25, an additional 0.33 percent. That led the 27 firm Bloomberg World Auto Manufacturers Index down as much as 1.6% to lowest intraday since January 7.
Analysts noted that 2019 already has opportunities to be the worst year yet in Tesla's brief history. The only year in which the shares recorded an annual decline was 201
Tesla took a blow after China on Monday took 25 percent of US $ 60 billion tariffs of US imports from June 1. President Donald Trump is expected to re-appear for this escalation by announcing plans to impose an additional 25 percent tariff on all remaining Chinese imports of around $ 300 billion.
While tariffs do not yet include vehicle imports, Teslas EV may be more expensive over the coming months.
"There is a fundamental increase in concern about China, and that a long-standing trade conflict could have a significant negative impact on Tesla's sales and margins after their request for a tariff waiver was recently denied," said Garrett Nelson, a CFRA analyst.
The increasingly drawn-out trade war against China assumed by Trump also means Tesla's efforts to accelerate the construction of his Shanghai Gigafactory to reduce further damage from the higher charges. Gigafactory is expected to produce more than 2000 Tesla EV's by the end of the year.
Tesla must also fight against China's car market, which derives from the worst decline of a generation. Sales have declined over the past 11 months, as trading tensions, a stacking economy and larger consumer trends weaken demand.
Tesla was not the only car manufacturer in trouble because of Trump's trade war, however. BMW AG and Daimler AG, the largest US-built vehicles in China, saw their shares in Frankfurt close to 1.2 percent and 3.3 percent, respectively. General Motors Company lost as much as 3.8 percent, while Ford Motor Company fell 3.3 percent.
China is Tesla's largest market and one that is crucial for Tesla's future profitability. Tesla earned over $ 2 billion in China in 2018 while doubling its sales.
It is estimated that Tesla sold 20,000 of its electric cars in China last year, with its most popular model as Model X. Tesla's three largest Supercharger stations in the world are located in China.