Shares of Tesla Inc. TSLA, -5.22% tumbled 10.5% to $640.00 in morning trading Tuesday, and have now plunged 27.5% from their record close, to put them on track to suffer their second bear market in less than six months. Many on Wall Street define a bear market as a decline of 20% or more on a closing basis from a significant peak. A close below $706.47, which is 20% below the Jan. 26 record close of $883.09, would make the bear market official. The last time the stock entered a bear market was Sept. 8, 2020, when it closed at $330.21, or 33.7% below the then-record close of $498.32 on Aug. 31. The stock rose to a new record on Nov. 19. Tesla’s stock has still run up 22.5% over the past three months, while the S&P 500 SPX, -0.86% has gained 6.9%. Among Tesla’s electric vehicle peers, shares of China-based Nio Inc. NIO, -8.33% took a 13.6% dive in morning trading, after closing Monday 19.4% below its Feb. 9 record close of $62.84. The stocks of XPeng Inc. XPEV, -5.97% and Li Auto Inc. LI, -7.72% both fell into bear markets on Dec. 1, while Nikola Corp. shares NKLA, -8.17% closed Monday 73.8% below its record close of $79.73 on June 9, 2020.
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