What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) fell 6.3% in the morning session after the EV battle in China continued to heat up as BYD announced its new "Super e-Platform," a technology it claimed could charge electric vehicles in just five minutes. The company added that the new technology had a peak charging speed of 1,000 kilowatts. To put it in perspective, Tesla's latest superchargers maxed out at 500 kilowatts (at the time BYD announced the Super e-Platform), so BYD's tech would be doubling that.

If the tech lives up to the hype, range anxiety (fear that an EV battery would run out before driving to the destination), one of the biggest roadblocks for EV adoption, could become a thing of the past.

And it was not just BYD making moves. Zeekr, another rising star in China's EV space, announced it was offering advanced driver-assistance features to its domestic customers for free. That's another headache for Tesla, which had been considered to rely on its Full Self-Driving (FSD) subscriptions as a competitive edge.

It all added up to a fierce fight for market share in China, and Wall Street was starting to take notice. Some expected Tesla's growth and profitability to face greater challenges. For example, RBC analyst Tom Narayan lowered his Tesla price target to $320, citing increased pressure on the company's full self-driving (FSD) subscription model. He also felt Tesla's FSD subscription fee would drop from $100 to $50 per month by 2026. On top of that, Narayan lowered his estimates for Tesla's market share in both China and Europe, cutting it from 20% to just 10%.

The shares closed the day at $225.49, down 5.2% from previous close.

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What The Market Is Telling Us

Tesla’s shares are extremely volatile and have had 120 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was about 23 hours ago when the stock dropped 6.7% on the news that markets remained concerned about the company's sales performance, as recent data highlighted significant weaknesses in Europe and China. These worries were further amplified by increasing competition in these regions, which could weaken the company's market position. Notably, Reuters reported that Tesla is offering a free trial of its Full-Self Driving (FSD) autonomous software to consumers in China. This move revealed the company's willingness to use incentives to attract customers and counter rising competition.