The Tesla share price is up 2.5% this Thursday after the company announced it would cut prices of its Chinese-made Model 3 sedan electric vehicles by 8%. This reduction would take into account Chinese state purchase subsidies and would see the cost of the Model 3 sedan going for just under 250,000 yuan or $36,850.
Other changes include the change in battery type, with the new cars expected to come with lithium iron phosphate (LFP) batteries. These changes are expected to drive more sales in the Chinese market.
Sales in this market proved to be the game-changer for Tesla at the 1st peak of the coronavirus pandemic. It sold more than 11,000 Model 3 electric vehicles produced at its Shanghai factory in May, after selling 10,160 units in March and 3,635 EVs in April. The Made-in-Shanghai Model 3 sedan vehicles are now the market leader in the Chinese EV market.
Technical Outlook for Tesla
The ascending trendline continues to provide support on the daily chart, enabling the higher lows on Tesla to combine with the lower highs to produce an evolving harmonic pattern. Price action is now challenging the 430.63 resistance. A successful break of that price level opens the door towards 457.12. 502.49 remains the post-stock-split high which needs to give way to confirm re-establishment of the uptrend.
Conversely, a rejection at current levels allows for a pullback to 401.43, with 368.52 and 305.57 lining up as potential targets to the south.
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Tesla Daily Chart
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