The re-escalation of a trade war between the US and China is hammering Tesla Inc. shares hardest among the world's biggest auto manufacturers.
Tesla plunged as much as 6.3 per cent to US$244.50, the lowest intraday since January 2017, and the stock led decliners among the 27-member Bloomberg World Auto Manufacturers Index. While finished vehicles weren't included on the list of US$60 billion worth of US goods that China announced Monday it will hit with 25 per cent tariffs, the duties reduce the likelihood of a lasting respite for American-made cars that took effect earlier this year.
This year already was shaping up to be the worst one yet for Tesla. The only year in which the stock recorded an annual drop was 2016, when the shares fell 11 per cent.
Chief Executive Officer Elon Musk has struggled to reassure investors about the record decline in quarterly vehicle deliveries Tesla registered in the first quarter. The company broke ground on a battery and vehicle factory on the outskirts of Shanghai in January, and Musk, 47, has said production could reach a rate of as much as 2,000 cars a week there by the end of this year.
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Germany's Daimler AG and BMW AG are the biggest importers of US-built vehicles in China. Their shares closed down 3.3 per cent and 1.2 per cent, respectively, in Frankfurt.