TLDR
- Tesla stock rose 1.2% in premarket trading Friday after dropping 4.6% Thursday, with October ending essentially flat for the month
- BYD has lost more than $20 billion in market value since May as Chinese regulators pressure automakers to stop aggressive price cuts
- October saw high volatility for Tesla with four trading days showing moves of more than 5%, compared to two such days in September
- BYD’s global expansion faces barriers including EU import tariffs and labor controversies in Brazil over alleged workplace violations
- November historically delivers better returns for Tesla stock with an average gain of 12% versus 2% in October
Tesla stock added 1.2% in premarket trading Friday to reach $445.24, closing out a volatile October that ultimately left shares nearly unchanged. The month featured wild swings but little net movement for the electric vehicle maker.
October trading saw Tesla shares move more than 5% in either direction on four separate occasions. That’s double the number seen in September when the stock climbed 33%. Despite reaching as high as $470.75 early in the month, just 4% below its all-time high of $488.54 from December 2024, shares couldn’t hold those levels.
Tesla stock has only traded above $470 three times and closed above that level once. Thursday brought a 4.6% drop as some AI stocks sold off, adding to the month’s choppy action.
The stock entered Friday down about $3 for October, essentially flat after all the turbulence. No analyst upgrades or downgrades drove Friday’s premarket gain, just normal market movement.
Halloween holds no special significance for Tesla historically. Over 11 Halloween trading sessions, shares have risen six times and fallen five times. The average move is about 0.5%, compared to Tesla’s typical daily gain of 0.2%.
BYD Faces Margin Pressure and Regulatory Headwinds
BYD, which overtook Tesla in global EV deliveries earlier this year, has shed more than $20 billion in market value since May. Investors are growing cautious about the Chinese automaker’s shrinking margins and uneven international expansion.
Chinese regulators have pushed automakers to compete on technology rather than price cuts. This shift forces BYD to scale back the aggressive discounting that fueled its rapid growth. Domestic demand is softening as economic growth cools and Chinese consumers become more selective.
Rivals like Li Auto and NIO are holding their ground in the domestic market. Volume growth no longer guarantees profit in China’s increasingly competitive landscape.
BYD’s international push faces obstacles. The European Union is preparing higher import tariffs on Chinese-made EVs. Officials in Mexico and Brazil have raised concerns over labor and environmental practices.
A subcontractor tied to BYD in Brazil came under fire for alleged slavery-like conditions. The controversy drew criticism from local regulators and damaged the company’s reputation. Plans for large-scale European production have slowed as trade tensions increase.
November Typically Brings Better Performance
Tesla’s annual shareholder meeting on November 6 should generate stock volatility. Investors will vote on CEO Elon Musk’s compensation package worth about $1 trillion if all incentives are met.
Most analysts expect the package to pass easily. Failure could irritate Musk and introduce uncertainty into the stock.
November historically treats Tesla stock better than October. The average October gain is about 2%. November averages 12% gains. Tesla stock has risen in 11 of 15 Novembers since going public in 2010, compared to just five positive Octobers.
BYD’s challenges may create an opening for Tesla. With its Chinese rival under pressure to protect margins and manage global compliance risks, Tesla has room to focus on expanding its technology lead in autonomous driving and battery design.
A slowdown in EV industry price cuts could help steady margins. This environment might give Tesla space to extend its stock gains.
Tesla stock was up 9% year-to-date and 76% over the past 12 months entering Friday’s trading.