Tesla’s stock drops as Musk issues a slowing warning
Tesla’s stock fell more than 12% on Thursday on the company’s announcement that this year’s sales growth will be slower than in 2023.
That reduced the company’s stock market worth by about $80 billion.
Despite lowering prices, Elon Musk‘s multibillionaire company Tesla stated that its sales growth «may be notably lower» in 2024.
Tesla’s quarterly results, released on Wednesday, fell short of Wall Street projections as well.
The corporation has been lowering pricing in important global areas, such as China and Europe, because it is up against fierce competition from conventional automakers and Chinese rivals like BYD.
The continued high cost of borrowing, which is a result of central banks all over the world maintaining high interest rates in an effort to fight inflation, has also reduced demand.
In addition, Musk forewarned investors that if trade barriers are not implemented, Chinese rivals «will pretty much demolish most other car companies in the world».
In the final three months of 2023, BYD surpassed Tesla to become the world’s best-selling electric vehicle manufacturer, prompting him to advocate for trade barriers in the fiercely competitive market.
Following years of rapid expansion, Tesla has warned of a slowdown, which it believes is a reflection of the declining demand for electric vehicles worldwide.
As of right now, Tesla’s stock has dropped by more than 25% in value this year.
