Tesla Shares Dip After Reports of a New Competitor
On Monday, Tesla became the largest ever new member of the S&P500 and its first day started in style, with share prices climbing almost 4% higher than its closing price the previous week in the first hour.
However, about halfway through the session, share price fell more than 5%. The stock recovered throughout the remainder of the session, but closed the day at a slight loss.
This followed the theme of a lot of other stocks yesterday, as the markets reacted to fears of a possible second wave of the new variant of coronavirus in Europe. However, in the case of Tesla, there was another piece of news which negatively affected its share price, whilst positively affecting that of Apple.
Reuters reported on Monday that Apple’s self-driving car project, ‘Titan’, which was rumoured to have been stopped in 2016, is in fact alive and kicking.
The report stated that Apple “is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology”.
This new battery technology will reportedly reduce cost whilst increasing driving range.
The auto industry is expensive to get into, but this would not present much of a barrier to a company whose third quarter earnings revealed it had almost $194 billion cash on hand.
All this amounts to a big new player in the industry. Will this cause the Tesla bubble to start to deflate?
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