Mar 9, 2020
Tesla shares plunge amid crash in oil prices, China virus risks
Bloomberg News
,Oil Crash Sends New Shock Through World Economy Reeling from Coronavirus
Tesla Inc. shares opened lower on Monday as concerns about a price war in oil spur a crash in crude prices and the coronavirus outbreak weighs heavily on car sales in China.
Shares of the electric-vehicle maker fell as much as 14 per cent to US$605 in New York before a wider sell-off prompted a market-wide trading halt. The shares last traded at these levels in late January. The stock had risen to about US$917 in mid-February, just before a broader meltdown hit the markets amid the intensifying virus risks.
Dwindling oil prices, triggered by the breakup of the OPEC+ alliance, spells trouble for Tesla. With both Russia and Saudi Arabia flooding the market with cheap oil, the company’s expensive battery-driven vehicles will become a tougher sell.
The slowdown in China is another major challenge, given a big part of the company’s growth trajectory is dependent on that country, which is one of the major global markets for electric cars.