Tesla's shares plummeted 11%, wiping out $73 billion in market value, triggered by concerns of slowed electric car sales growth and heightened competition from Chinese rivals. In Q4, Tesla reported a substantial 40% drop in adjusted earnings per share, while revenue, exceeding $25 billion, missed market predictions. The stock, doubling in 2023, faced a weak start in 2024, declining by 16%. Chinese automaker BYD outselling Tesla in the previous quarter raised alarms, prompting Elon Musk to acknowledge the global competitiveness of Chinese car companies.
Analysts expressed concerns about Tesla's shrinking margins, exacerbated by an 8.2% operating margin drop in Q4. The lack of clarity on the company's strategy during the earnings call added to investor unease. An anti-dumping investigation in Europe underscored the rising competition, potentially leading to increased tariffs on car imports from China.
Despite challenges, analysts anticipate a turnaround with the launch of Tesla's lower-cost vehicle. Additionally, some foresee positive momentum as the broader economic environment may favor Tesla, with expectations of decreasing interest rates benefiting both Tesla and the wider automotive sector.
Predicting specific stock movements is challenging. The recent challenges faced by Tesla, including slowing growth, increased competition, and disappointing earnings, have contributed to a significant stock decline. Whether the stock will drop below $150 depends on various factors, including market dynamics, company performance, and broader economic conditions. Investors should closely monitor developments and how competitors of Teslas future results do. I believe that Tesla on a shorter term basis may keep decreasing but it's hard to say wether it will surpass 150.
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