Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Tesla stock drops 16% from its peak, time to buy the dip?

As we witness this week's disappointing Q3 delivery figures pushing the stock prices even lower, the question arises: Is it time to stay cautiously around the EV titan, or buy the dip?

Source: Bloomberg

Tesla's share prices have taken a steep dive by over 16% from their peak in July. As we witness this week's disappointing Q3 delivery figures pushing the stock price even lower, the question arises: Is it time for investors to stay cautiously around the EV titan, or could this tumultuous period present a dip-buying opportunity?

Tesla’s challenges

As a vital indicator for its to-be-reported earnings for the third quarter, Tesla's vehicle deliveries fell short of Wall Street predictions with a nearly 7% decline from the prior quarter, totaling 435,059 vehicles.

Tesla attributed the lower production and delivery figures to scheduled downtime at its factories and stressed that: “our 2023 volume target of around 1.8 million vehicles remains unchanged.”

Source: Tesla

Still, the disappointment on the Q3 data, which came after a record second-quarter deliveries, causing its share prices to fall by 2% immediately.

Why are investors so concerned about Tesla's sales and deliveries?

Beyond the economic headwinds that no business can escape, Tesla faces its own set of hurdles. As the electric vehicle market expands, competition also grows fiercer. China's BYD is now on track to beat Tesla as the world's largest electric vehicle seller, thanks to its aggressive global sales expansion footprint and cheaper price tag.

BYD reported sales of 431,603 fully-electric vehicles in the three months ending on September 30, indicating a 23% increase from the second quarter. During the same period, Tesla shipped 435,059 cars worldwide. Not only is Tesla's growth rate noticeably slowing, but what's even more noteworthy is that the gap between the two EV producers is now less than 4,000 vehicles, the closest ever.

While Tesla's shortfall in Q3 deliveries may be seen as a short-term issue, given that its factories are currently occupied with the production of a refreshed Model 3 and the new Cybertruck, it raises a disquieting question: Is Tesla capable of defending its kingdom against a well-equipped competitor? Furthermore, will the intensifying competition erode Tesla's once-proud profit margins?

Tesla technical analysis

On the daily chart, the current prices are trading within the lower region of a symmetric triangle pattern, with the lower trendline having provided strong support over the past week. Notably, the price has made multiple attempts to breach the 50-day moving average (MA) without success, establishing the level of $250-$255 as immediate resistance.

Conversely, a breakout below the 100-day MA would significantly increase the likelihood of a drop below $240 and potentially breach the months-long trendline dating back to May. Such a scenario is likely to trigger substantial selling pressure.

From a sentiment perspective, the Relative Strength Index (RSI) remains close to the neutral level, suggesting a cautious approach is warranted for both buyers and sellers for now.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.