Following Tesla's warning of a potential slowdown in electric car sales growth and the looming threat from Chinese competitors, the company's shares experienced a substantial decline, plunging as much as 11 percent after the market opened. This downturn resulted in a staggering $73 billion being wiped off Tesla's market value, according to CNN.
During an earnings presentation, the electric vehicle giant revealed that its sales growth for the current year might be significantly lower than the previous year, citing the ongoing development of a "next-generation" vehicle, likely a more affordable model. Despite achieving a notable 38 percent increase in deliveries in the past year compared to 2022, Tesla had initially aimed for an annual growth rate of 50 percent averaged over multiple years.
The financial results for the last quarter disappointed investors, with adjusted earnings per share dropping by 40 percent from the previous year. Although revenue rose by 3 percent, exceeding $25 billion, it fell short of market expectations. This marks the second consecutive quarter in which Tesla failed to meet analysts' earnings forecasts, following a series of better-than-expected results since the beginning of 2021.
Tesla's stock, which had doubled in price over the course of 2023, experienced a weak start in 2024, with a 16 percent decline prior to the recent earnings report. Currently trading at its lowest level since April of the previous year, the intraday losses on Thursday were comparable to a significant one-day fall observed in late December 2022, where concerns about Tesla's sales and profitability, along with broader economic uncertainties, led to an 11.4 percent drop.
(With Agency Inputs)
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