Tesla loses over $82 billion, stock plunges 12% in a single day after ‘disastrous’ earnings call

The stock value of Tesla saw a significant dip of just over 12% on Thursday following remarks by CEO Elon Musk highlighting the challenges posed by Chinese electric-car manufacturers, whom he referred to as “the most competitive car companies in the world.”

During Tesla’s earnings call on Wednesday, Musk praised Chinese carmakers such as BYD, Geely, and SAIC, emphasizing their excellence and warning that, without trade barriers, they could potentially outshine most other global car companies.

Musk’s remarks contributed to a substantial decrease in Tesla’s market capitalization, which plummeted by $82 billion on Thursday.

In addition to Musk’s comments on the Chinese market, lower sales projections for 2024 and uncertainty regarding potential interest rate adjustments by the Federal Reserve further impacted Tesla’s market value.

The stock traded around $182 on Thursday afternoon, marking a 27% decline year-to-date.

Earlier this month, Tesla lost its position as the world’s largest electric vehicle (EV) maker to BYD, a Chinese carmaker backed by Warren Buffett.

Despite implementing price cuts on its U.S. vehicles in the previous year to compete with lower-cost Chinese EVs, Tesla faced challenges in maintaining its leadership in the EV sector.

The Biden administration has explored raising tariffs on Chinese EVs, with a current 25% tariff already applicable. Meanwhile, the European Commission is investigating Chinese automakers for potential tariff increases, citing concerns about state subsidies distorting the market.

As Tesla contends with increased competition, the company is preparing to launch a lower-cost model to enter the affordable EV category dominated by Chinese companies. Musk announced that production of Tesla’s “next-generation” $25,000 electric vehicle is set to commence in mid-2025.

While uncertainties surround Tesla’s future in the lower-cost EV sector, Musk indicated a willingness to collaborate with Chinese companies through licensing arrangements for self-driving technology and other innovations, albeit for a price.

The $82 billion decline in Tesla’s market value on Thursday nearly exceeds the combined valuations of General Motors ($48 billion) and Ford ($45 billion) and equals about one-third of Toyota’s ($270 billion) market cap. As Tesla faces challenges meeting its volume and margin growth expectations, investors are left to assess whether the discounted stock price accurately reflects the downsized expectations.

Despite the stock’s decline, Tesla’s price-to-earnings ratio remains high, with Musk proposing an equity award that could dilute current shareholders. This move raises concerns among investors about Musk’s vision for Tesla’s trajectory and the potential impact on shareholder returns.

(With inputs from agencies)



from Firstpost Tech Latest News https://ift.tt/kf4YrvA

Comments

Post a Comment

Popular posts from this blog

COVID-19 origins: Should we pay more attention to the lab leak theory and formally investigate it?

Image
A year and a half into the pandemic, we still do not know exactly where the SARS-CoV-2 virus, which causes Covid-19, came from. The prevailing view so far has been that the virus “spilled over” from bats into humans. But there are increasing calls to investigate the possibility that it emerged from a lab in Wuhan, China, where Covid first appeared at the end of 2019. So what do we know for sure, and what do we need still to find out? We know the sequence of the SARS-CoV-2 virus is close to that of bat coronaviruses . Several decades ago its “ancestor” was circulating in bat populations in southern Asia. But there are still many unanswered questions: we don’t know how the virus arrived in Wuhan, how its sequence evolved to allow human infection, and under what conditions it infected the first people who crossed its path. And for each of these stages, we don’t know whether there was a human contribution (direct or indirect). Zoonotic transmission pathways, in other words the pas
Read more

Menstrual cups are cheaper, more sustainable than pads and tampons for women

Image
Every year in America, women spend at least US$2.8 billion on sanitary pads and tampons that can take hundreds of years to decompose . Is there a more economical and environmentally friendly way? To find out, we asked Susan Powers , a professor of sustainable environmental systems at Clarkson University about her work comparing the environmental impact of tampons, sanitary pads and menstrual cups. What is a menstrual cup? A menstrual cup is a type of reusable feminine hygiene product. It’s a small, flexible bell-shaped cup made of rubber or silicone that a woman inserts into her vagina to catch and collect menstrual fluid. It can be used for up to 12 hours, after which it is removed to dispose of the fluid and cleaned. The cup is rinsed with hot water and soap between each insertion and sterilized in boiling water at least once per period. A cup can last up to 10 years . Although menstrual cups have been around for decades, they historically have been less popular than pads or ta
Read more

Human bodies respond to infections differently depending on the time of day

Image
When microorganisms – such as bacteria or viruses – infect us, our immune system jumps into action. It’s highly trained to sense and eliminate infections and clear up any damage caused by them. It’s typically assumed our immune systems work the exact same way regardless of whether an infection occurs during the day or at night. But research spanning over half a century now shows our bodies actually respond differently at day and night. The reason for this is our body clock, and the fact that each cell in the body, including our immune cells, can tell what time of day it is. Our body clock has evolved over millions of years to help us survive. Every cell in the body has a collection of proteins that indicate the time depending on their levels. Knowing whether it’s day or night means our body can adjust its functions and behaviours (such as when we want to eat) to the correct time. Our body clock does this by generating 24 hour rhythms (also termed circadian rhythms ) in how cells f
Read more