Due to multiple unfavorable factors such as the decline in its global electric vehicle market share in April, the share price of electric vehicle manufacturer Tesla Inc. has fallen continuously this year, especially in the past three weeks.
Tesla’s stock price has been underperforming in recent months, and the sharp decline in the past three weeks has further increased the pressure on the company’s stock price. The reason for the decline in Tesla’s stock price may be related to investors’ concerns about the company’s recent poor conditions.
For example, the company’s electric vehicle products are under increasing competitive threats from competitors, falling into a continuous shortage of automotive chips and cannot be resolved. Its electric vehicles have repeatedly encountered traffic safety accidents and have been subject to user complaints and investigations by regulatory agencies. Sales in the Chinese electric car market have slowed down, and the construction of its German electric car factory has been delayed.
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In addition, according to the “Wall Street Journal” report, US regulators warned Tesla last year that the company’s CEO Elon Musk’s tweets on social media platforms violated court orders twice.
As of Wednesday on the Nasdaq Stock Exchange, local time, Tesla’s stock price fell by $18.78 to close at 605.12, a drop of 3.01%, the largest intraday drop since May 13. As of the day’s close, the company’s market value was 582.93 billion U.S. dollars.
In after-hours trading that day, the company’s stock price fell another 2.72 US dollars, falling to 602.40 US dollars per share, a 0.45% decline.
Investment bank Credit Suisse analyst Dan Levy said that Tesla’s global electric vehicle market share in April dropped from 29% in March to 11%, which may set the company’s global electric vehicle market. The share is at the lowest level since January 2019.
Levy said that Tesla’s electric vehicle market share is declining in the three major markets of China, Europe, and the United States. The company’s dominant position in the electric vehicle market is being eroded by new competitors and recent price increases.
It is these factors that have formed a drag on Tesla’s stock price, but the challenge to the company’s stock price may continue. Industry analysts warned that given the small size of the electric vehicle market, the industry will be negatively affected by the current epidemic of the new crown pneumonia virus and chip shortages, and Tesla’s stock price will experience unpredictable fluctuations.
“It is difficult to predict the performance of each month in the future.” Craig Irwin, an analyst at investment bank Roth Capital Partners, said in an email to customers. “Tesla may continue to do a lot of work. Good, but its performance will not be as good as many people expected, and it will not reach the average performance of the market.”
Since the beginning of this year, Tesla’s stock price has fallen by 14%, while the S&P 500 index has risen by 12% over the same period. Compared with 2020, Tesla’s share price performance can be described as a major change. In 2020, as investors flocked to growth stocks, the company’s stock price soared by more than 8 times.
But this is not what it used to be. According to a recent survey of 44 analysts on Wall Street by Bloomberg, more than a quarter of the analysts gave Tesla a “sell” rating.
