Tesla’s tumultuous year, plagued by price cuts, recalls and layoffs, continued on Monday, with shares of Elon Musk’s electric car company falling more than 4% ahead of Tuesday’s highly anticipated quarterly results.
Tesla stock traded at around $142, near its lowest price since January 6, 2023, when it closed at $113.06.
Since the beginning of this year, Tesla has fallen nearly 43%, wiping out more than $60 billion on Mr. Musk’s net worth and knocking him down as the world’s richest people.
Musk’s fortunes are unlikely to improve come Tuesday. According to Bloomberg, Tesla’s operating profit is expected to decline by 40%, marking the first decline in sales in four years.
“Investors have been focused on Tesla’s EV sales and cost advantages so far, so the stock is poised for a potentially painful ownership transition,” Deutsche Bank analyst Emanuel Rosner told the paper. We’ll have to go through it,” he told the media.
Monday’s stock decline followed price cuts in the U.S. as the EV maker cut prices in a number of major markets, including China and Germany, as it grapples with declining sales and increasing price competition, particularly with China, the company said. This follows the announcement over the weekend. Electric car.
Tesla also lowered the price of its fully self-driving (FSD) driver assistance software in the U.S. from $12,000 to $8,000 on Saturday.
The price cuts follow last week’s 10% global workforce reduction. Separately, Tesla announced a recall of about 4,000 Cybertrucks due to a potentially fatal flaw in the gas pedal.
A combination of bad news has left investors less optimistic about Tesla’s upcoming earnings report.
Tesla reported earlier this month that it had delivered 386,810 vehicles in the first three months of the year, far below analysts’ expectations.
The company also told investors that growth will be “significantly lower” this year because rising interest rates are making it more difficult for consumers to borrow money to buy cars.
Last month, Tesla had to temporarily suspend production at its Berlin factory after a suspected arson attack caused significant damage to the facility.
Musk canceled a visit to India this week where he was scheduled to meet Prime Minister Narendra Modi.
The tycoon, who has seen his fortune decline by about 35% since reaching a record $256 billion last year, cited “very heavy obligations to Tesla” as the reason for the postponement of his India visit. ”.
Musk’s wealth was valued at $168 billion as of Monday, making him the fourth richest person in the world, according to the Bloomberg Billionaires Index.
South African-born Musk has long been the world’s richest man, but the title is now held by French billionaire Bernard Arnault and his family, with a fortune of $218 billion.
Amazon founder Jeff Bezos ($197 billion) and Meta CEO Mark Zuckerberg ($171 billion) are the second and third richest people in the world, respectively.
Musk’s company is feeling the pinch of intense competition in the EV market, particularly from emerging Chinese companies such as Warren Buffett-backed BYD.
Hoping to compete, Tesla also lowered EV prices in China and Germany, matching similar price cuts in the United States.
“Tesla’s prices must change frequently to match production and demand,” Musk wrote on his social media platform X over the weekend.
Earlier this year, Reuters reported that Tesla would halt plans to develop an affordable electric vehicle and instead focus on building robotaxis.
Musk denied the claims, writing to X: “Reuters is lying.” The news agency said it stood by its report.
Last week, Tesla asked investors to vote again on Musk’s $56 billion compensation package. The deal was approved by shareholders in 2018 but was invalidated by a Delaware court earlier this year.
