Tesla‘s stock fell more than 12% on Thursday following the company’s announcement that this year’s sales growth will be slower than in 2023.
That reduced the stock market value of the corporation by almost $80 billion (£63 billion).
Despite lowering prices, the multibillionaire Elon Musk-led electric carmaker stated that its sales growth “may be notably lower” in 2024.
Tesla’s quarterly results, released on Wednesday, fell short of Wall Street projections as well.
The corporation has been lowering pricing in important global areas, such as China and Europe, because it is up against fierce competition from conventional automakers and Chinese rivals like BYD.
The continued high cost of borrowing, which is a result of central banks all over the world maintaining high interest rates in an effort to fight inflation, has also reduced demand.
Price reductions, increased R&D expenses, and costs related to ramping up production of the new Cybertruck, according to Tesla, have all reduced its profit margin.
In addition, the firm announced that it was “between two major growth waves” and that it will begin producing a new, less expensive car in the second half of the following year.
Mr. Musk also forewarned investors that if trade restrictions are not implemented, Chinese rivals “will pretty much demolish most other car companies in the world”.
In the final three months of 2023, BYD surpassed Tesla to become the world’s best-selling electric vehicle manufacturer, prompting him to advocate for trade barriers in the fiercely competitive market.
Following years of rapid expansion, Tesla has warned of a slowdown, which it believes is a reflection of the declining demand for electric vehicles worldwide.
As of right now, Tesla’s stock has dropped by more than 25% in value this year.