The Houston Chronicle is reporting that Tesla stock took a considerable tumble on Thursday at the opening bell, warning investors of the slowed environment for sales growth after posting less than satisfactory fourth-quarter earnings.
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A Wednesday letter to shareholders from Tesla warned investors that sales growth this year may be significantly lower than last year as the company looks to create a more affordable, next-generation electric vehicle at its plant in Austin, Texas.
The letter stated that Tesla is between "big growth waves" due to the global expansion of the Model 3 and Y vehicles, and the research and arrival of an all-new vehicle. Tesla reported a fourth-quarter adjusted profit of 71 cents per share on revenue of $25.17 billion. Earlier predictions estimated a profit of 73 cents per share on expected revenue of $25.64 million.
The EV company lowered prices worldwide in 2023 in an effort to spur sales. Tesla stock dropped by 9 percent at the opening bell on Thursday.
What Do The Experts Say?
Senior Equity Analyst Dan Ives of Wedbush Securities reported had this to say:
"Consistent with last quarter's call, investors wanted to get their arms around the falling margins and constant, never-ending price cuts seen globally, but instead, we heard from a much more cautious Musk who focused on production, next-gen vehicle timelines, and FSD/AI investments where much of the larger Tesla story was talked about instead of concrete guidance," Ives wrote.
Another analyst, Jeffrey Osborne of TD Cowen, said it will be hard for EV competitors to catch up to Tesla as the company works on electrical efficiency and better battery technology. But also warned that there was a great deal of risk in coming quarters for production. This could possibly put pressure on profit margins and stock as the company opens new plants in Germany and Texas, as well as rolls out new vehicles.
The company's stock fell 9% after CEO Elon Musk warned of a slowed sales environment. Tesla's valuation is set to about $50 billion but its stock is already down 16.4 percent in January. Other EV vehicles have been feeling the pinch on Wall Street as well.
Shares of other EV makers also fell, with Rivian Automotive Inc (RIVN.O), Lucid Group (LCID.O), and Fisker (FSR.N), down between 1.4% and 5.4%.
