Tesla is due to report financial results for the first quarter of 2024 after the US market close on Tuesday.

Tesla announces price cut

In a post on social media platform X, formerly Twitter, Elon Musk said “Tesla prices must change frequently in order to match production with demand”.

In China, the firm cut the starting price of the revamped Model 3 in China by 14,000 yuan ($1,934; £1,562) to 231,900 yuan.

Prices of the Model Y, Model X and Model S vehicles in the U.S. were cut by $2,000 (£1,616) on Friday.

There were also price cuts in many other countries in Europe, the Middle East and Africa, according to the Reuters news agency.

Tesla sale falls

The swathe of price cuts comes after the company reported this month that its global vehicle deliveries and sales in Q1 had fallen for the first time in nearly four years.

EV price war

A price war has been intensifying between EV makers, with particularly fierce competition coming from Chinese firms.

The company triggered an EV price war over a year ago when it aggressively cut prices at the expense of profit margins.

Tesla has been slow to refresh its ageing models while rivals in China, such as BYD and Nio, have been rolling out cheaper models. Chinese smartphone maker Xiaomi also launched its first EV last month.

Layoffs at Tesla

Last week, Tesla announced plans to lay off more than 10% of its global workforce, about 14,000 jobs.

Other issues faced by Tesla

On Friday, the firm recalled thousands of its new Cybertrucks over safety concerns.

It is because their accelerator pedals currently risk getting trapped by the interior trim, increasing the possibility of crashes. Musk has also faced criticisms from investors who say he is stretched too thin after his purchase of the social media platform Twitter, which he renamed X, in 2022. Meanwhile, Tesla has asked its shareholders to vote in favor of Musk’s $56bn pay package, which was rejected this year by a judge who called it an “unfathomable sum”.

“This is another black eye for Tesla, which has added to the chaos going on for Musk,” said Dan Ives, senior equity analyst at Wedbush Securities. “Cybertruck is the pedestal moment and a recall out of the gates is a bad look.”

The price cuts ended a chaotic week for Tesla.

Tesla stock update

Tesla shares fell below $150 this week, wiping away all gains the company made in the past year. Tesla’s shares have fallen by more than 40% since the start of this year. 

The post Tesla Announces Price Cut around the Globe as Sales Dips appeared first on Industry Leaders Magazine.

According to experts, nearly $25 billion worth of Tesla stock changed hands on January 3. Analysts expect the Tesla selloff to continue as the company missed market expectations for the fourth-quarter coupled with lessening demand in China.

Tesla Stock Selloff continues

On January 4, investors were given a brief respite after watching Tesla stock slide drastically, especially during the latter part of the year. It briefly hit $113.56, after hovering around $110 for the past few days. After falling nearly 12% on Tuesday, stocks climbed a moderate 5%, making a small comeback.

For a brief moment, it seemed that the accident in Northern California, where a family drove off a cliff in their Tesla car had some effect on the stock. Despite tumbling nearly 300 feet down a cliff next to the Pacific Ocean, the family of four escaped with minor injuries. Pretty much a metaphor for Tesla’s Wednesday performance at the stock market.

But just as law officials clarified that they had arrested the Tesla driver, the father, for intentionally driving off the cliff, markets saw a huge Tesla selloff the very next day. What appears to be a good end result is not lasting unless the intention behind the extreme step matches the outcome.

Last year in January, Tesla stock had hit $368.74 per share. The drastic reversal in fortune has been brought on partly by high inflation, lessening demand, and the controversy surrounding Elon Musk’s takeover of Twitter.

In December 2022, Tesla shares suffered due to strict Covid-19 lockdowns at its Shanghai factory. The production pause added to the electric carmaker’s woes, with the decline carrying over into the new year.

In an attempt to lure buyers, the automaker has reduced prices for its models in China. The Model 3, Tesla’s least expensive vehicle, now costs about $33,427 down from about $38,704, as per the company’s website. The price of the Model Y was lowered to $37,830, down from about $42,051. 

Panicked retailers Adopt Risk-Averse Approach

As of January 3, the electric carmaker had wiped off all the gains it accumulated since it was added to the S&P 500 in 2020.

What was once considered a solid hold stock, is now falling as it fails to meet market expectations. Add to it the alleged unavailability of the Tesla CEO, who has taken over the helm at Twitter, even the most optimistic investor cannot ignore the facts.

Unless investors see concrete proof that Tesla is working on changing its trajectory, they might continue with the Tesla selloff. As inflation persists despite Fed rate hikes, small time traders want to tread cautiously.

“Tesla, as it has grown, is now entering a phase of still solid but slower growth,” said Morningstar analyst Seth Goldstein. Being a major auto producer, it “is likely to feel more of an impact from an economic slowdown”, he added.

Some brokerages have also cut price estimates and earnings forecasts, further dampening the mood in a slow economy. Tesla is also facing increased competition from established automakers like Ford and GM, who are now taking the EV market by its horns.

Worldwide, Tesla delivered 405,000 vehicles in the fourth quarter, almost 13,000 short of consensus forecasts of 418,000.

Furthermore, whispers of a recession this year has made traders reconsider their portfolios, and as Tesla loses steam in sales and leadership, investors have taken to dumping stock.

It remains to be seen whether Tesla share prices will recover down the line, as the electric carmaker has proven to be resilient during crashes, in real-life and on the stock market.

The post Why Are Retailers Conducting a Tesla Selloff appeared first on Industry Leaders Magazine.