Tesla’s stock price fell nearly 5% on Monday, U.S. time. Previously, Tesla’s long-term partner and battery supplier Panasonic released a financial report admitting that in the third quarter ending at the end of September 2023, Panasonic’s battery production in Japan was reduced.
The news stoked investor concerns about weak demand for electric vehicles, especially those that are more expensive and may not be eligible for U.S. government tax breaks or other incentives. Panasonic’s batteries are used in Tesla’s earlier, more expensive Model X SUV and Model S sedan.
During Tesla’s third-quarter earnings call on October 18, CEO Elon Musk reminded shareholders that high interest rates have put tremendous pressure on the company, forcing electric vehicles to keep prices low , could hinder consumers’ ability to buy or lease electric vehicles.
Musk has also repeatedly said that Tesla faces tougher challenges as the much-anticipated electric pickup truck CyberTruck enters production. He lamented not long ago: “CyberTruck is us digging our own grave.”
Musk also said on the call: “I just want to temper people’s expectations for CyberTruck. It’s a great product, but from a financial perspective, it will take 12 to 18 months before it becomes a significant cash flow.” Contributors.”
Tesla shares have fallen more than 18% since that call. Tesla shorts made $3 billion between that day and last Friday’s close, according to data from London-based financial information services firm Ortex. As of October 27, Tesla shorts were worth approximately $18.08 billion, accounting for 3.21% of the free float.
U.S. investment bank Bernstein analyst Toni Sacconaghi wrote in a research note to clients on Monday that the company expects Tesla’s “margins to decline and sales to decline in fiscal 2024.” disappointment”. Bernstein expects Tesla’s stock price target to be $150 over the next 12 months.
Although Wall Street expects Tesla to deliver 2.3 million vehicles next year, an increase of about 500,000 vehicles year-over-year, Sacconaghi wrote: “To increase deliveries of 500,000 vehicles, Tesla will have to cut prices by approximately 16 %, which would reduce overall operating margins by 750 basis points. It is unclear whether Tesla will cut prices further to drive enough demand growth without causing negative free cash flow. We believe Tesla will Deliveries may be lower than market expectations and face lower profit margins.”
Bernstein has a pessimistic view on Tesla, expecting Tesla to deliver 2.15 million vehicles and diluted earnings per share of $2.59 next year, while the market consensus is that it will deliver 2.3 million vehicles and earn $3.30 per share. .
This pessimism is spreading across all sectors of the EV market. Shares of ON Semiconductor, which supplies chips for electric vehicles, plunged 20% on Monday after the company gave disappointing fourth-quarter guidance.
Tesla shares fell to $197 as of Monday, down nearly 5% from Friday’s closing price of $207. In less than five hours of trading, $7 billion was wiped off the value of 715 million shares and vested options held by Musk.
After the stock market closed on October 17, Musk announced disappointing third-quarter earnings and poor fourth-quarter guidance, exacerbating Tesla’s share price decline. Since then, Tesla’s stock price has fallen 23%, wiping out $189 billion in market value, and Musk’s personal wealth has shrunk by $41 billion.
THIS IS A SPONSOR PROMOTION: >>>>>>>>>>>>>
Geekwills is an online shop that connects consumers with millions of products and brands around the world with the mission to empower them to live their best lives. Geekwills is committed to offering the most affordable quality products to enable consumers and sellers to fulfill their dreams in an inclusive environment.
