The message has heightened investor angst over the extent of adversities experienced from China's COVID Zero policy in recent months.Īlthough the Shanghai lockdown has cost Tesla lost production estimated at approximately 40,000 vehicles in the current quarter, it has already shown positive progress in making a strong comeback. Musk had recently warned of a " tough quarter", pinpointing supply chain constraints and production headwinds in China as key culprits. In addition to challenges in ramping up productions in Shanghai following a three-week lockdown ordered by the Chinese government earlier in the second quarter to keep COVID infection rates at bay, Tesla is also grappling with a nightmare in getting outputs up to speed in its new Berlin and Austin facilities that came online in March and April, respectively. The recent pullback in Tesla's valuation is creating an attractive entry opportunity to take part in generous upside potential underpinned by continued acceleration in EV and autonomous mobility adoption over the long run. Commanding close to 15% of the global EV market in 2021, Tesla is taking a page from Apple ( AAPL) in smartphones and applying it to the electrification and digitization of the automotive industry. While recent headwinds may continue to add pressure to the stock's near-term performance, the EV titan remains an industry leader from a fundamental perspective. Even Tesla's confirmation on a three-for-one stock split proposal has done little to salvage the stock from its recent declines. Increasing risks of a recession have also driven a series of downward adjustments to price targets on Wall Street in anticipation of a potential slowdown in consumer demand and rising interest rates in the near term. Tesla has lost more than 30% of its market value since it last traded above $1,000 per share in April, as investors grappled with the payment structure on Musk's proposed Twitter deal weighing on the EV stock's performance, in addition to the production nightmare in Shanghai due to China's strict adherence to its COVID Zero policy. Meanwhile, on the other hand, Musk may be setting softer expectations to drive a much-needed earnings surprise boost for the stock in a couple of weeks, considering Tesla's positive track record in beating estimates. On one hand, the adverse remarks may be a drag on the electric vehicle ("EV") stock's performance, which still trades at a higher market value than that of the top legacy automakers combined. Job cuts, production nightmares, rising input costs, and a looming recession - Elon Musk has been preparing everyone for the worst at Tesla ( NASDAQ: TSLA) every time he has had something to say in recent weeks, spreading fear, uncertainty, and doubt (FUD). This story corrects the year of Tesla’s all-time high to 2021, not 2020.Dimitrios Kambouris/Getty Images Entertainment The Austin, Texas, company began offering a $3,750 incentive on its Model 3 sedan and Model Y SUV on its website earlier this month, but on Wednesday doubled the discount to $7,500 for those who take delivery between now and Dec. This week, Tesla boosted the discounts it’s offering through year’s end on its two top-selling models, an indication that demand is slowing for its electric vehicles. They were more than $360 each on April 1 and hit an all-time high of more than $414 in November of 2021. Tesla shares fell more than 1% on Friday, to $123.74. The company has since lost nearly two-thirds of its value, at a time when rival automakers are cutting in on Tesla’s dominant share of electric vehicle sales. Tesla’s market value was over $1.1 trillion on April 1, the last trading day before Musk disclosed he was buying up Twitter shares. Tesla investors have grown weary of the 24/7 Twitter chaos that they say has distracted the eccentric CEO from the electric car company, his main source of wealth.
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