Tesla (TSLA) shares slid to a critical support level on Friday, extending a decline that has erased more than 23% from the stock's 2025 peak. The drop comes as Chinese electric vehicle maker Xpeng (XPEV) signaled plans to launch a direct competitor to Tesla's Model Y, adding to intensifying competition in the EV space.
Xpeng co-founder hinted that the company is nearing a breakthrough with a new model aimed at challenging the Model Y in both China and Europe. The statement followed the launch of Xpeng's L03, an affordable electric SUV priced at approximately €35,600—undercutting the Model Y, which starts at €39,990. Xpeng delivered 40,126 vehicles in June and 103,295 in the second quarter, up from 34,611 and 103,181 respectively in the same periods last year.
Investors are now turning their attention to Tesla's second-quarter earnings report, scheduled for release on Wednesday. Analysts expect revenue of $26.36 billion, a 17.2% increase year-over-year, driven by a rebound in deliveries. Tesla produced 450,000 vehicles and delivered 480,000 in Q2, a significant improvement from the previous quarter's 408,000 produced and 358,000 delivered.
The delivery recovery may have been supported by rising gasoline prices amid geopolitical tensions, which historically encourage consumers to consider EVs. However, Tesla faces headwinds from elevated costs, particularly in data center operations, and mounting competition from Chinese rivals such as BYD, SAIC, Nio, and Li Auto.
From a technical perspective, TSLA has fallen below its 50-day exponential moving average (EMA) and the Percentage Price Oscillator (PPO) has turned negative. The stock is currently testing support near the ascending trendline that has held since April 2024. A break below this level could open the door to further downside toward $350, while a rebound above $400 would signal renewed bullish momentum.
For broader market context, investors are also watching other major tech earnings. Microsoft Stock Slips 1.5% as Analysts Trim Targets Ahead of Q4 Earnings and Alphabet Stock Dips 2% on Gemini 3.5 Pro Delay, Yet Analysts Remain Bullish Ahead of Earnings highlight the cautious sentiment across the tech sector.
For the full year, analysts project Tesla's revenue will reach $104.5 billion, up 10% from 2024. The upcoming earnings report will be a key catalyst for the stock, with investors closely watching margins, delivery guidance, and commentary on competitive dynamics.
This article is for informational purposes only and does not constitute financial advice.
