CEO of Tesla The company’s shares fell more than 12 percent after Elon Musk indicated a slowdown in sales despite price cuts. That has already hurt the margins of the world’s most valuable automaker. At the same time, investors’ concerns about sluggish demand and Chinese competition have increased. Tesla shares fell more than 12 percent after the market opened. The company’s market value dropped $80 billion just hours after it warned of slowing growth in electric car sales and an existential threat from Chinese rivals. The world’s most valuable automaker said in an earnings presentation on Wednesday that its sales growth this year could be significantly slower than last year.
Significant increase of 38 percent in delivery
Although last year there was a notable increase of 38 percent in deliveries compared to 2022, Tesla had previously targeted an average 50 percent annual growth rate over the several years, CNN reported. Tesla’s financial results for the last quarter were also disappointing, with adjusted earnings per share down 40 percent from a year earlier, and revenue, which rose 3 percent to $25 billion, falling below market forecasts. After a string of better-than-expected results to begin 2021, it was the second consecutive quarter the company fell short of analysts’ earnings estimates.
Stock price to double during 2023
The stock price is set to double during 2023, but those gains came during the first half of the year and Tesla shares are off to a weak start in 2024, falling 16 percent ahead of Wednesday’s earnings report. According to CNN report, the stock is currently trading at its lowest level since April last year. Thursday’s intraday losses were equivalent to an unusually large one-day decline of 11.4 percent in late December 2022. CNN reported that at the time, investors were concerned about Tesla’s sales and profitability, as well as the health of the US economy. At least nine brokerages downgraded the stock, while seven raised their ratings. On average, the company has a “Hold” rating with an average price target of $225, which is 23 percent above the stock’s closing price of $182.63 on Thursday.
Input: IANS
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