Elon Musk’s Tesla is facing trouble because of investor warning. Thats the reason Tesla Shares price comes down.
Tesla shares fell on sales growth
Tesla experienced a 10 percent drop in its stock shares when trading opened in New York on Thursday. The drop came after a statement in their earnings report. The electric car company has warned investors to expect sales to pick up this year due to declining demand, increased competition, and persistently high interest rates, which have offset the impact of recent price cuts. Tesla CEO Elon Musk acknowledged that the company may be navigating itself through time for now but has announced plans to launch a more affordable car by the second half of 2025. Musk noted that this upcoming model will include “manufacturing technology” to reduce costs.
Tesla shares decline: Elon Musk’s EV Maker sheds $70 billion in market capital
Surprisingly, Tesla’s stock price fell 10% to $187 at 10:30 a.m. Eastern Time, following the release of an earnings report that indicated a slowdown in sales growth in 2024. As a result, the market capitalization witnessed a loss of $66 billion. The quarterly report, covering the period ended Dec. 31, revealed earnings per share of $0.71, below Wall Street estimates, according to a Refinitives poll. Additionally, Tesla’s revenue of $25.2 billion failed to meet analysts’ expectations. Market reaction Tesla attributed the decline to weak demand, increased competition, and persistently high interest rates that offset the impact of price cuts, reflecting concerns about declining sales growth. Tesla shares fell 10% in New York on Thursday. Elon Musk, Tesla’s CEO, acknowledged these challenges and said the company found itself “between two growth waves.” Despite the setback, Musk announced plans to begin production of one more car in the latter half of 2025, incorporating “revolutionary manufacturing technologies” aimed at reducing overall production costs. This timeline aligns with the five-year gap since the plan was proposed. Simply put, Tesla shares stock underscores investors’ concerns about the company’s projected sales growth.
Descriptive list
Tesla shares is facing several challenges due to its growing inventory stockpile. The Austin-based company said its global supply is now at 16 days, up from 15 days in the previous quarter and a significant increase from just four days a year ago. Despite discounts and incentives like charging for popular models, inventory continues to be a bottleneck for the electric car maker.
How the threat from China
In response to growing competition from rivals, Tesla shares has been cutting prices for more than a year to boost sales. A notable change occurred in the first quarter of the year when Chinese automaker BYD surpassed Tesla shares. During an analyst call, Elon Musk acknowledged that Chinese automakers are now considered “global.” He worries that if trade barriers are not established, these Chinese automakers are likely to outpace others globally. In light of growing competition, European officials have launched a dumping investigation to explore the possibility of imposing higher tariffs on car imports from China. Such investigations typically assess whether products are being exported at prices below their production costs, reflecting the growing dynamics, at scale, in the electric vehicle market.
look after
Despite considering Tesla’s recent earnings as “disappointing and out of the ordinary,” CFRA Research equity analyst Garrett Nelson is optimistic about the future, as he expects Tesla’s introduction of an affordable car in the coming years to have a positive impact on the company. In his note to the stock on Wednesday, Nelson expressed hope for a release. How it could potentially contribute to Tesla’s market performance. Similarly, Ben Barringer, technology analyst at Quilter Chevyot, shares this view, believing overall economic conditions are slowly aligning favorably for Tesla. These analysts acknowledge the challenge. I also see growth and recovery opportunities for the electric car maker, showing confidence in Tesla’s ability to overcome obstacles and take advantage of upcoming opportunities.