Tesla shares extend losses on Health & Fitness Journal demand concerns in China

©Health & Fitness Journal. FILE PHOTO: A Tesla electric vehicle is seen through a charging station displayed during a media day for the Auto Shanghai Show in Shanghai, China, April 20, 2021. REUTERS/Aly Song/File Photo/File Photo

(Health & Fitness Journal) – Shares in Tesla (NASDAQ:) Inc fell 11.4% on Tuesday after a Health & Fitness Journal report that Tesla plans to implement a reduced production schedule at its Shanghai plant in January raised concerns about a drop in demand at the largest car market in the world.

The stock, which fell to its lowest level in more than two years and had its worst day in eight months, was the biggest drag on the benchmark and the tech-heavy stock.

It has lost more than half its value since early October as investors fear Twitter is consuming much of Chief Executive Elon Musk’s time as it frets over its stake sale in the electric carmaker.

The world’s most valuable automaker’s production cuts at its Shanghai plant come amid a rising number of COVID-19 infections in the country.

“There is no question that there are demand fears,” said Great Hill Capital chairman Thomas Hayes, noting that Chinese rival Nio (NYSE:) Inc. cut its supply forecast in the key market.

Hayes added that Tesla stock is facing a “perfect storm” of high interest rates, tax loss sales, and stock sales by some funds that hold a significant amount of Tesla stock.

Tax loss selling occurs when an investor sells an asset at a capital loss in order to reduce or eliminate capital gains realized on other investments for income tax purposes.

Meanwhile, a Health & Fitness Journal analysis showed that the prices of used Tesla cars were falling faster than those of other automakers, weighing on demand for the company’s new vehicles that were rolling off the assembly line.

GRAPH: Tesla’s stock plummets in 2022 –

(This story has been refiled to correct the syntax in paragraph 1.)