"Tesla Falls to the $500 Range as Much as It Rose"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The plunge in stock prices of electric vehicle companies, which saw significant gains last year, shows no signs of stopping. Tesla's stock has fallen to the $500 range, and Chinese electric vehicle companies such as Nio and Li Auto are also experiencing sharp declines day after day.

At 10 a.m. local time on the 5th, Tesla's stock price on the Nasdaq market fell 5% compared to the previous day, trading in the $580 range. Nio dropped 6%, and Li Auto saw a decline of around 4%.

Although the Nasdaq index fell about 0.6% due to rising Treasury yields driven by strong employment data, the decline among electric vehicle companies is particularly notable.

Tesla's stock price has adjusted downward by 30% from the intraday high recorded in January. Its market capitalization, which once reached $830 billion, has shrunk to around $570 billion.

The ARK Innovation ETF, which has heavily invested in Tesla, also dropped to the $120 level. The decline rate on this day reached 3%. The ARK Innovation ETF traded around $150 in January.

According to S3 Partners, Tesla short selling surged by $118 billion since last week. The increase in investors betting against Tesla's stock price could be a factor limiting a price rebound.

One day earlier, billionaire investor Ron Baron, who has been a long-term investor in Tesla, revealed that he sold 1.8 million shares of Tesla stock.

TheStreet.com reported that Tesla's stock price is also being weighed down by declining sales in China and the possibility of reduced production in the electric vehicle industry due to semiconductor shortages. Additionally, Tesla's purchase of $15 billion worth of Bitcoin, combined with Bitcoin's roughly 20% price correction, is cited as another factor contributing to the stock price decline.