PanamaTimes

Monday, Apr 15, 2024

Tesla shares plunge 13 percent on growth concerns

Tesla shares plunge 13 percent on growth concerns

Once worth more than $1 trillion, Tesla lost more than 65 percent in 2022 and $60bn on Tuesday alone.

Tesla Inc shares started 2023 where they left off last year, plunging more than 13 percent on Tuesday on growing worries about weakening demand and logistical problems that have hampered deliveries for the world’s most valuable automaker.

Once worth more than $1 trillion, Tesla lost more than 65 percent in market value in a tumultuous 2022 that saw it increasingly challenged by other automakers and as it struggled to deal with production issues that hampered deliveries.

Tuesday’s slide knocked off more than $50bn in market value, roughly equal to the valuation of rival Ford Motor Co, which last year sold three times as many cars as Tesla.

The selloff came after Tesla missed market expectations for fourth-quarter deliveries despite shipping a record number of vehicles.

The company’s stock was the worst performer on the benchmark S&P 500 index on Tuesday as it fell to $106.50 a share. As of 18:00 GMT, it was the second most-traded stock on the United States exchanges, with nearly 142 million shares changing hands.

Several Wall Street analysts said they expected more pressure on the stock in coming months as it faces stiff competition from other automakers and weaker global demand.

At least four brokerages cut their price targets and earnings estimates on Tuesday, pointing to the deliveries miss and Tesla’s decision to offer more incentives to boost demand in China and the US, the two largest global auto markets.


Cracks in demand


“Demand overall is starting to crack a bit for Tesla, and the company will need to adjust and cut prices more especially in China, which remains the key to the growth story,” Wedbush Securities analyst Dan Ives said.

Global automakers have in the past few months battled a demand downturn in China – the world’s top auto market, where the spread of 1COVID1-19 has hit economic growth and consumer spending.

Tesla is offering hefty discounts there as well as a subsidy for insurance costs.

The electric-vehicle maker’s performance in 2022 was among the worst on the S&P 500 index.

“You have so many things working against the stock. One obviously is Musk’s involvement in Twitter,” said Dennis Dick, market structure analyst and trader at Triple D Trading.

Tesla’s market value has declined by about $400bn since Chief Executive Elon Musk secured financing to buy social media firm Twitter.

Some of that drop has come from his share sale to fund the $44bn deal, while the stock also lost value due to worries among investors that Musk has been distracted by the social media company.

Worth about $332bn now, Tesla is still the world’s most valuable automaker, even though its production is a fraction of rivals such as Toyota Motor Corp.

Tesla delivered 405,278 vehicles in the fourth quarter, short of analysts’ estimates of 431,117. For all of 2022, its deliveries rose by 40 percent, missing Musk’s 50 percent annual target.

The result “came at the cost of higher incentives, suggesting lower pricing and margin”, brokerage JP Morgan said in a note, lowering its price target by $25 to $125.

The median price target of 41 analysts on the stock was $250, according to Refinitiv data, with the lowest price of $85 by Roth Capital Partners.

The shortfall highlighted the logistics hurdles facing a company that is known for its end-of-quarter delivery rush. The gap between production and deliveries has widened to 34,000 vehicles as more cars got stuck in transit.

The automaker also plans to run a reduced production schedule in January at its Shanghai plant, extending the lowered output it began in December into 2023, Reuters reported.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Apple warns against drying iPhones with rice
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Global Law Enforcement Dismantles Lockbit Ransomware Operation
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
The President of Argentina Javier Mile does not fly private, he flies commercial, with the citizens he represents. And they LOVE him for it.
Bitcoin Reaches $50,000 for First Time in Over Two Years
Belo Horizonte: Brazil's Rising Carnival Hotspot for 2024
In El Salvador, the 'Trump of Latin America' stuns the world with a speech slamming woke policing after winning a landslide election
Tucker’s interview with Putin is over 50M views on X within the first 5 hours.
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
President Nayib Bukele has proudly announced El Salvador's remarkable achievement of becoming the safest nation in the Western Hemisphere.
Former Chilean President Sebastian Piñera Dies in Helicopter Crash
This farmer seems to understand science a bit more than the event organizer, Klaus Schwab.
Facebook turns 20: From Mark Zuckerberg's dormitory to a $1trn company
The Coolest Dictator in the World" on the Path to Victory in El Salvador
Macron, France and fake news
Indian-Origin Man 'King' Arrested For Smuggling $16 Million Drugs Into US
Can someone teach Americans that not every person with slanted eyes is Chinese?
Europe's Farmers Feeding the People, Protesting Against Politicians Who Do Nothing for Their Country and Serve Only Themselves at Taxpayers' Expense
Paris Restaurant That Inspired 'Ratatouille' Loses $1.6 Million Worth Of Wine
Brazilian Police Investigate Bolsonaro's Son for Alleged Illegal Spying
Police in Brazil Raid Residence of Bolsonaro Associate Over Allegations of Illegal Spying
Border Dispute Escalates as Texas Governor Vows Increased Razor Wire
OpenAI Enhances ChatGPT-4 Model, Potentially Addressing AI "Laziness" Issue
The NSA finally acknowledges spying on Americans by acquiring sensitive data
Report Reveals Toxic Telegram Group Generating X-Rated AI-Generated Fake Images of Taylor Swift
US Border Patrol States 'No Plans' to Remove Razor Wire Installed in Texas
Bitcoin Experiences Approximately 20% Decline in Value
Klaus Schwab recently appointed himself as the Earth's "trustee of the future."
DeSantis Drops Out, Endorses Trump.
Nikki Haley said former President Trump is "just not at the same level" of mental fitness as he was while president in 2016.
Residents of a southern Mexican town set the government palace on fire in response to the police killing of a young man
Samsung Launches AI-Driven Galaxy S24, Ushering in New Smartphone Era
Judge Questions SEC's Regulatory Overreach in Coinbase Lawsuit
The Ecuador prosecutor who was investigating the television studio attack, has been assassinated.
Is artificial intelligence the solution to cyber security threats?
Vivek Ramaswamy suspends his US election campaign and endorses Trump.
Viral Satire: A Staged Satirical Clip Mistaken as Real Footage from the 2024 World Economic Forum in Davos
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Ecuador Reports 178 Hostages in Prison Gang Standoff
The Startling Cuban Espionage Case That Has Rattled the US Government
Two Armed Men in Ecuador, Dressed as Batman and The Joker Storm the Streets.
Armed Gang Raids Ecuadorian TV Station Following State of Emergency Declaration
Anti-Democratic Canada: Journalist Arrested for Questioning Canadian Finance Minister on Support of Terrorist Group
Ecuador's 'Most-Wanted' Criminal Vanishes from Prison
Mexican Cartel Supplied Wi-Fi to Locals Under Threat of Fatal Consequences for Non-Compliance
Border Surge Leads to Over 11,000 Migrants Waiting in Northern Mexico
Outsider Candidates Triumph in Latin American Elections
As Argentina Goes to the Polls, Will the Proposal to Replace the Peso with the Dollar Secure Votes?
Fatal Shark Attack Claims Life of Boston Woman Paddleboarding Near Bahamas Resort, According to Police
×