$94 billion lost in value in 2 weeks – El Financiero

Tesla is aggressively cutting the prices of its cars From early 2023 in an effort to boost demand. But the result is that its profit margins are continuously declining. Without regulatory credits, Tesla’s automotive gross margin fell to 16.3 percent in the third quarter from 27.9 percent a year earlier. And the pressure is only increasing, now that production workers at Tesla plants in the United States are getting pay increases.

“We are going through a period Cyclical recession for electric vehiclesBut competitive dynamics are adding to the cyclical pressures, Ivana Delevska, chief investment officer at Spear Invest, said in an interview. “Price cuts and declining margins are a function of this adverse competitive dynamic.”

To increase problems, Tesla has had to divert shipments destined for its Berlin plant following Western military actions in the Red Sea and security concerns, and is suspending most production at its plant near Berlin from January 29 to February 11, according to a person familiar with the matter.

Tesla ‘slow’: This is what the delivery figures have been like in recent months

Tesla first warned about slowing demand for electric vehicles during its third-quarter earnings report in October. Almost immediately afterward, automakers and suppliers around the world made their own pessimistic forecasts. Many automakers backed out of their expansion plans.

Then, earlier this month, Tesla reported its fourth quarter delivery numbers. Although they were better than analysts expected, they left the company behind China’s BYD in global electric car sales.

The result has been a Bad news for Tesla investors. Last year, the stock was the eighth-best performer in the S&P 500. So far this year, it is the eighth-worst performer.

Naturally, Musk is taking a big hit personally. The world’s richest man, who amassed more wealth in 2023 than any other person on the planet, has seen his net worth decline by $23 billion so far this year, according to the Bloomberg Billionaires Index. Musk overtook Bernard Arnault to top Bloomberg’s wealth index last year, but Jeff Bezos is now closing in fast, with $179 billion as of Friday’s close versus Musk’s $206 billion.

most of musk net worth That comes from its 13 percent stake in Tesla and about 304 million exercisable stock options. He owns about 42 percent of SpaceX, worth about $53 billion, according to the Bloomberg Wealth Index.

Tesla Has Problems, But It’s Still #1

All told, Tesla remains a major player in the global transition away from gasoline-powered vehicles to mostly electric vehicles. Reason: It is way ahead of its potential rivals. maybe china BYD It has overtaken Tesla in the number of units sold, but still lags behind in revenue and profits. And BYD does not sell cars in the United States, where Tesla remains the market leader.

In many ways, Tesla’s biggest problem may be its past success and the hope it generated. As investors poured into the stock, Tesla’s market capitalization skyrocketed, making it much larger than any other car company in the world. However, the fact that the stock was priced perfectly also made it vulnerable to big reactions to any negative news.

That’s why many Tesla defenders argue that it shouldn’t be compared to regular car companies. For him, the company’s true ultimate value lies in the future and his hope is to develop the first true autonomous vehicle. The only problem is that Tesla has been promising it for years, and most experts say the technology is still years, maybe even decades, away.

“Tesla has failed to deliver on its promises of fully autonomous driving and artificial intelligence,” said Speer’s Delevska, who is already under evaluation. “Just being another automaker won’t be enough to achieve a $750 billion valuation.”