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Why Tesla Stock Fell 14% on Monday

By Daniel Sparks - Updated Mar 9, 2020 at 1:26PM

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Ouch! Shares of the electric-car maker just got slammed.

What happened

Shares of Tesla (TSLA 1.24%) were slammed on Monday, falling as much as 14%. As of 11:42 a.m. EDT, the stock was down about 10%.

The electric-car maker's stock's decline came as the overall market sell-off of the last few weeks worsened. Growth stocks like Tesla were hit particularly hard on Monday.

A white Model X with its falcon wing doors open

Model X. Image source: Tesla.

So what

While further spread of the COVID-19 coronavirus might be one reason for more fear in the stock market on Monday, a primary catalyst for the market decline was likely Saudi Arabia's decision to launch an oil price war. Oil prices fell more than 20% after Saudi Arabia slashed prices and increased production.

Some investors might also argue that lower gas prices as a result of an oil price war could make transitioning to electric vehicles less compelling, potentially having a negative impact on Tesla.

Now what

Tesla stock's decline on Monday adds to a sharp pullback over the last few weeks. Shares have slid about 31% since Feb. 19. Notably, though, the stock is still up 180% over the last six months.

Investors have big expectations for the electric-car maker in 2020. In the company's fourth-quarter update, management guided for full-year vehicle deliveries to grow at a rate of 36% year over year or greater. In addition, Tesla said both solar and storage deployments should increase 50% year over year or greater during 2020.

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