Despite a Monday rally, Tesla stock is the worst performer in the S&P 500 so far this year. Still.
Since 2024 kicked off, the Austin, Texas-based company’s stock has sunk 30%. As a result, Tesla is no longer one of the top 10 U.S. companies by market capitalization, trailing behind Visa and — more recently — JPMorgan Chase.
The only other company that comes close to matching Tesla’s poor stock performance is Boeing, the aerospace giant suffering a backlash over what has recently become multiple reports of parts falling out of its planes. Boeing stock is down 29% this year.
Elon Musk’s electric vehicle maker is widely expected to miss Wall Street’s estimates for revenue and deliveries for the first quarter of 2024, and several analysts have cut their stock price targets. The share of “bullish” ratings on Tesla stock has dropped to its lowest level since April 2021, Bloomberg reports.
Morgan Stanley’s Adam Jonas has said Tesla might lose money this year and cut his earnings projection. UBS has cut its price target from from $225 per share to $165, reduced its forecast for deliveries from 2.02 million units to 1.96 million. And Wells Fargo has downgraded Tesla stock to underweight, with a price target of $125, down from $200.
Tesla “is a growth company with no growth,” Wells Fargo analyst Colin Langan wrote in a note to investors last week. In January, Tesla warned that sales growth would be “notably lower” in 2024.
Although part of the lowered expectations are caused by slowing global demand for EVs that has affected the entire industry, Tesla has faced a unique inferno of difficulties this year.
Most recently, the far-left “Volcano Group” set an electricity transmission tower near Tesla’s Gigafactory Berlin-Brandenburg on fire. Although the incident only halted production at the German facility for about a week, it cost the automaker about $1 billion and delayed production.
“The slower ramp up in Model 3 in the U.S. and earlier factory shut down, as well as the recent arson attack at the Berlin facility, will impact factory efficiency gains,” Deutsche Bank said in a note to investors. The bank also noted that increased costs from production of the low-margin low-margin Cybertruck will impact the EV maker’s earnings for the quarter.
Additionally, Tesla is facing a slew of competition in China from both local automakers — led by BYD, which beat Musk’s automaker in electric car sales last quarter — and other foreign competitors. BYD has introduced a whole array of cheaper cars and drastically cut prices, which last month pushed Tesla and several other companies to lower their own prices. Xiaomi, a Chinese smartphone giant, has also introduced its first EV.
Is Tesla staging a comeback?
But after a recent breath of good news for Tesla, the stock rose 5% on Monday morning.
The Indian government on Friday slashed import taxes on certain EVs made by automakers that commit to a massive investment in domestic manufacturing in the country, acquiescing to a years-long lobbying effort from Tesla.
The government will require companies to commit to investing at least $500 million and begin domestic manufacturing within three years. In return, carmakers that meet those requirements will be allowed to import up to 8,000 EVs that cost $35,000 or more annually at a tax rate of 15%. Under current regulations, India levies taxes of 70% or even 100% on imported EVs, depending on their value.
“I am confident that Tesla will be in India and will do so as soon as humanly possible,” Musk told reporters last June after meeting with Indian Prime Minister Narendra Modi.
Over the weekend, Tesla released an update to its driver assistance technology — Full Self-Driving — which has received largely positive reviews from customers, many of whom are also investors. Just days before, a previous version of the technology — and Tesla’s Autopilot — failed a top auto safety group’s tests.
Additionally, fellow EV maker Rivian’s customers gained access to Tesla’s network of chargers over the weekend, according to posts on social media. Tesla is also raising prices on its Model Y SUV in both the U.S. and Europe, a move that Deutsche Bank said is likely targeted at driving up sales.
And in a newly-released interview with controversial ex-CNN anchor Don Lemon, Musk teased the new Tesla Roadster. The CEO has previously said a prototype for the next-generation model should be unveiled by the end of this year, with production starting in 2025.
“It’s going to have some rocket technology in it,” Musk said. “I think the only way to do something cooler than Cybertruck is to combine Tesla and SpaceX technology to create something that’s not even really a car.
“Something that’s never existed before,” he added.
Musk also addressed Tesla’s fluctuating stock, tellin Lemon that “stocks go up and down, but what really matters is ‘are we making and delivering great products?”