Tesla shares drop 2% after report says China sales sank 70% in October

Shares of electric car maker Tesla fell on Tuesday following a report that its vehicle sales in China plunged 70 percent in October from a year ago.

Tesla shares lost 2 percent in premarket trading.

An official at China’s passenger car association reportedly told Reuters that data from the industry body showed Tesla sold just 211 cars in the world’s largest auto market in the prior month.

Tesla did not immediately respond to CNBC’s request for comment.

The Elon Musk-led Tesla imports all of the vehicles it sells in China, highlighting how the ongoing trade dispute between the United States and China is hampering the U.S. automaker.

In announcing its third-quarter production numbers last month, Tesla said it was able to “significantly increase” deliveries of its Model S and Model X cars “notwithstanding the headwinds we have been facing from the ongoing trade tensions between the US and China.”

The electric vehicle company pointed out that China has put an import tariff of 40 percent on Tesla vehicles, compared with 15 percent for other vehicles imported to China. Tesla said it costs 55 percent to 60 percent more to make its vehicles than “the exact same car” made by Chinese producers.

Despite the drop in shares Tuesday, Tesla’s stock is well ahead of the broader U.S. equity market in 2018. The automaker was up more than 11 percent through Monday’s close since January versus the S&P 500’s flat performance.

—CNBC’s Michael Sheetz contributed reporting.

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