Tesla stock price can reach $600 in October. Here’s how
- Tesla is likely to cut China-based Model 3 prices by 8% as it looks to remove cobalt-based batteries
- Tesla sold more than 11,000 cars, mostly Model 3 sedans, in August in China
- Shares of Tesla fell almost 14% last month on the back of a sharp correction in the stock market
Shares of Tesla (TSLA) fell nearly 14% in September as the stock market corrected after a faster-than-anticipated recovery from the pandemic-fueled losses. The buyers are now looking for an attractive entry point to push the stock above the $500 mark again.
Fundamental analysis: Tesla cuts China-based Model 3 prices
Following its decision to start producing some of its Model 3 sedans with cheaper cobalt-free batteries, Tesla is likely to cut China-based Model 3 prices by 8%, according to Bloomberg. The new price for this type of car is 249,900 yuan ($36,805), instead of 271,550 yuan, or ($39,900). The new price list includes government subsidies for electric vehicles.
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Model 3 sedans are currently being produced using nickel-manganese-cobalt batteries. Instead, the producer of electric vehicles is looking to start using lithium-iron-phosphate (LFP) batteries, which consist of no cobalt.
This news doesn’t come as a major surprise given that Tesla’s CEO Elon Musk announced plans to remove cobalt from its batteries in the future. This metal is one of the most expensive metals used in the manufacturing of electric vehicles batteries, hence the decrease in Tesla car prices may become new normality.
Tesla sold more than 11,000 cars, mostly Model 3 sedans, in August in China.
Technical analysis: A bullish triangle
Tesla stock price fell almost 14% last month on the back of a sharp correction in the stock market. However, shares opened the new month higher as Tesla stock price is up 2% in premarket trading.
A correction in the price led to the creation of a bullish triangle. This format is seen as a continuation chart pattern that leads towards an extension of the uptrend, following a brief period of consolidation.
A break of the triangle may be happening now, while a close above the $440 mark will definitely confirm it. In this case, the measured target of the triangle points to $610, signalling an upside of over 40% compared to the current market price. Hence, this chart pattern offers an attractive trading setup to invest in TSLA shares.
Tesla will start making some of its China-based Model 3s with lithium-iron-phosphate (LFP), instead of more expensive cobalt. Tesla share price is on the brink of a break this week, which could eventually push the price action to $610 in October.
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