New York, Jan 20, 2026, 16:10 EST — After-hours
- Tesla shares fell with a tech-led selloff on Tuesday.
- CEO Elon Musk pointed to progress on Tesla’s in-house AI chip work and Dojo3 project.
- Traders are looking ahead to the next earnings update and possible fallout from shifting EV trade rules.
Tesla shares fell 4.2% on Tuesday and ended the regular session at $419.25. The stock slipped a further 0.1% to $418.86 in after-hours trading, when some investors keep trading after the closing bell. The Nasdaq closed down 2.4% and the S&P 500 fell 2.1%.
The selling gathered pace after U.S. President Donald Trump threatened new tariffs on several European countries unless the United States is allowed to acquire Greenland, spooking investors and sending money into so-called safe-haven assets.
For Tesla, the slide lands at an awkward time. The stock has been a high-beta trade on anything tied to AI and self-driving, and it tends to move hard when the tape turns risk-off.
Musk added fuel to that debate overnight. He said Tesla would resume work on the Dojo3 project after progress on its AI5 chip design, and invited job applications for what he described as “the highest volume chips in the world.” Bloomberg.com
Canada has also pushed itself into the Tesla conversation. Ottawa will allow up to 49,000 vehicles a year to be imported from China at a 6.1% tariff under a new deal, though half the quota will be reserved for cars priced below 35,000 Canadian dollars ($25,189), a threshold Tesla’s models exceed, Reuters reported. “This new agreement could allow resumption of those exports rather quickly,” said Sam Fiorani, vice president of research at AutoForecast Solutions, pointing to Tesla’s prior exports from its Shanghai plant. Yale Zhang, managing director at consultancy AutoForesight, said Tesla’s simpler lineup makes it “flexible to sell cars produced in any country,” an advantage over Chinese rivals such as BYD and Nio, which do not yet have a Canadian sales presence. Reuters
Even so, Tuesday’s price action looked more like macro than company-specific trading. Tesla moved in step with other mega-cap tech names as traders cut exposure.
The next hard catalyst is Tesla’s quarterly report, which will test whether investors are still willing to pay for a story that leans heavily on autonomy and AI alongside the core car business. Watch margins, pricing, and any concrete milestones on chip development and compute spending.
But the near-term path is messy. The Canada opening comes with caps and politics, and trade rules can tighten as fast as they loosen. A jumpy macro backdrop also means Tesla can fall on days when nothing at the company really changes.
Tesla is set to post its fourth-quarter 2025 financial results after market close on Wednesday, Jan. 28, with a live Q&A webcast scheduled for 5:30 p.m. Eastern.
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