Tesla’s abysmal 2024 start has investors questioning the carmaker’s destination
In the crumple zone… Tesla’s been having a bad one lately. Six weeks into the new year, it’s the worst-performing S&P 500 stock, shedding ~$215B worth of market cap (7X Boeing’s losses). It’s been two weeks since a Delaware court voided CEO Elon Musk’s $56B pay package — the biggest in corporate history — and the EV maker’s board has kept silent. That’s not all that has investors reaching for the e-brake:
Big cuts: Investors haven’t been loving Tesla’s global price cuts, which contributed to car sales growing only 1% last quarter — despite a record 485K quarterly deliveries.
Losing speed: Tesla warned investors that its sales growth would be “notably lower” this year. It blamed cooling demand, growing competition, and high interest rates.
Other obstacles: Tesla workers are bracing for potential layoffs; Super Bowl ads called for a Tesla boycott; and this month the company recalled 2.2M (nearly all) of its US vehicles for a software update after a federal safety audit.
Wild rides… might be catching up to Tesla investors. Before Musk’s pay package was voided, he said he wasn’t comfortable growing Tesla’s AI and robotics biz without owning 25% of the company. And if Tesla isn’t a limitless tech company (as Musk suggests it could be), it's an automaker that’s ceded lots of road to rivals: Chinese EV maker BYD recently passed Tesla in global EV sales, and Hyundai is nipping at its tires in the US (outpacing Tesla’s growth last year). Adding to investor concerns: reports that Musk has been using illegal drugs.
First-mover advantage isn’t forever… For a long time, Tesla had a virtually empty road to become the EV leader. But as the industry’s matured, OG automakers and newer rivals have made things feel more bumper to bumper. Once Tesla’s greatest asset, Musk may be turning into more of a liability as competition heats up. With EV demand cooling, Tesla doesn’t need more problems than the industry already has.