Why is Tesla stock collapsing? The reasons for the fall of the company’s shares
Elon Musk’s electric vehicle company Tesla has seen its shares tumbling 40% so far this year, and projections indicate they may slide even further down.
Last Friday, Tesla stock extended its plunge to over 40% so far this year, and experts indicate the worst may not yet be over. Last week’s decrease to approximately $147 per share is well below its November 2021 high of more than $400. The drop was triggered by the recall of almost 4,000 Cybertrucks the company has on the road.
The stock went down further during Tuesday’s trading, reaching $145 per share.
2024: Not a banner year for Tesla
The year didn’t start off well for Tesla, with its January earnings missing both sales and profit targets. The company also reported a 9% dip in first-quarter revenue on Tuesday, which is the largest downturn in 12 years. There was also a massive recall of nearly 2.2 million vehicles- almost all of the units it sold in the United States- over problems with their warning light.
However, the stock increased 11% in extended trading after Tesla CEO Elon Musk announced that the company could begin the production of new, more affordable electric vehicles as early as late this year.
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EV sales have been slowing down, and both Tesla and its competitors have engaged in a price war to try to boost demand. Slashing prices has caused Tesla’s profits to plunge 18% in the first quarter.
The company implemented a huge restructuring earlier this month, slashing more than 10% of jobs around the world. Tesla has an international workforce of around 140,000 workers globally, so the job cuts will likely affect at least 14,000 employees.
Aside from the job cuts, two senior executives of the EV company- senior vice president Drew Baglino and vice president for public policy and business development Rohan Patel announced that they were leaving their posts.