What happened
Tesla (TSLA 2.76%) shareholders approved a 3-for-1 stock split earlier this month, and it will take effect later this week. While some investors may be looking forward to that, Tesla shares were dropping Monday as more important aspects of the business were being given priority. Tesla shares were down as much as 3.5% in early trading, and remained 2.3% below Friday's closing price as of 12:35 p.m. ET.
So what
Tesla investors are experiencing a cross-current of news after the weekend. A presumably positive development for the company was CEO Elon Musk's Twitter post over the weekend that the company will boost the price of its full self-driving (FSD) option by 25% beginning Sept. 5. That is when a new update rolls out. FSD currently costs $12,000 or is available for $199 per month using a subscription. It will cost $15,000 to be included with vehicles ordered after the rollout of the new software.
NASDAQ: TSLA
Key Data Points
Now what
That sounds like good news if the company feels it has enough demand to absorb the price increase. However, the self-driving software is also still in beta testing with some customers, and critics including consumer safety advocate Ralph Nader don't think the National Highway Traffic Safety Administration should allow that process to continue.
Also working against the stock today is concern over Tesla's operations in China. The company's Shanghai plant has been working to get production back on track after several city lockdowns were put in place to control the spread of COVID-19. Now a drought in the country is forcing the rationing of electricity as hydroelectric power has been limited. The Wall Street Journal reported that Tesla has asked Shanghai authorities to intervene on its behalf to prioritize manufacturers affected by the power cuts that supply Tesla's plant.
While some investors may be looking forward to the stock being traded at the new share price post-stock split, that event doesn't affect the business itself. The production from Tesla's Shanghai plant, however, does. Investors have yet to learn whether the current power situation there will hamper those efforts, but some are selling the stock before finding out.
