Tesla Stock Down 30% This Year. What Happened to the EV King?

4月5日

The electric-car maker is in dire need of charging after losing more than $260 billion this year and turning Elon Musk into the biggest loser among the world’s wealthiest.

Table of Contents
» How It Started vs How It’s Going
» Nothing Magnificent About It
» Competition Revs Up
» Teslas Pile Up on Weak Demand
» If You’re Having a Bad Day, Read This

📍How It Started vs How It’s Going
Tesla (ticker: TSLA) kicked off the year as the big tech highflyer we all know. With a valuation of more than $780 billion, the electric-car maker stepped into 2024 as the world’s largest EV seller. Deliveries were standing at record highs and chief executive Elon Musk was the world’s richest person and was looking at a gargantuan $55 billion pay day.

All of that was taken away in one way or another. Chinese automaker BYD (ticker: 1211) dethroned the EV kingpin by selling 526,000 EVs for the fourth quarter of 2023, more than Tesla’s 484,000. Even as Tesla reclaimed the top spot in the January through March quarter, it flagged a worrying signal that its business was shrinking.

As for Elon Musk, he lost a court battle over his lofty $55 billion pay package when a judge called it “an unfathomable sum.” Shortly before that, he handed the World’s Richest title to Amazon founder Jeff Bezos.

📍Nothing Magnificent About It
Chugging through first-quarter twists and turns, Tesla drifted away from the highly exclusive club called the “Magnificent Seven.” The group of companies with a snappy nickname is made up of Microsoft (ticker: MSFT), Nvidia (ticker: NVDA), Facebook parent Meta (ticker: META), Google parent Alphabet (ticker: GOOGL), Amazon (ticker: AMZN), Apple (ticker: AAPL), and outsider-in-the-making Tesla (ticker: TSLA).

How did that happen and why is Tesla at risk of falling out of the Magnificent Seven? Tesla’s valuation — which is notoriously volatile and hard to pinpoint — saw a massive 30% drop over the first three months of 2024, turning the stock into the worst performer in the S&P 500. More than $260 billion has been washed out since early January, giving the EV maker a price tag of around $520 billion today. Zoom further out, and you see Tesla peaked during the Reddit stocks meme-trading era of 2021 when shares hit an all-time high of $417. Back then, Tesla became the first car manufacturer to break into the $1 trillion club.


Tesla stock has lost about a third of its valuation this year. Source: TradingView

The drastic fall spotlights a stark difference between Tesla and the rest of the Magnificent Seven big shots. The other tech giants are at the top of well-developed yet competitive industries. Take for example Microsoft — the software mainstay has created for itself a competitive moat in the enterprise and retail software business.

Tesla, on the other hand, is the trailblazer for the EV revolution but charged up rivals are shifting gears, threatening to soak up market share fast.

📍Competition Revs Up
Chinese smartphone maker Xiaomi (ticker: 1810) last week unveiled a slick-looking, tech-rich electric ride. The model is called SU7 and it clocked up 10,000 reservations in the first 4 minutes after launch. Then it got to 89,000 in 24 hours. The successful launch bumped Xiaomi’s market cap by $4 billion to around $50 billion, or 10 times less than Tesla. The SU7, however, is priced lower than a high-end Model 3.

Tesla has more rivals to outsell, among them BYD (ticker: 1211) and the more-niche player Rivian (ticker: RIVN). Rivian is an EV startup that marked a 70% increase in sales for the first quarter. The number, however, is a tiny 13,980 units delivered.

📍Teslas Pile Up on Weak Demand
Tesla’s year went from bad to worse this week when it announced it had delivered 386,810 EVs in the first quarter. The number was about 20,000 below the most bearish forecast on Wall Street. It was also 9% lower than last year’s first quarter, indicating that the company’s business is shrinking.
More importantly, Tesla produced 433,371 units, leaving about 46,000 waiting to be purchased by customers. The difference between production and deliveries meant that unsold models are piling up. A demand issue maybe?

📍If You’re Having a Bad Day, Read This
In all that chaos, Elon Musk emerged as the world’s worst moneymaker, taking a huge blow to his net worth so far this year. According to the Bloomberg Billionaires Index, the eccentric engineer is down $45 billion to roughly $180 billion, taking the number one spot on the loser board.

Elon Musk owns a 20.5% stake in Tesla worth about $120 billion, according to a December 31 filing. The stake consists of 411 million shares of common stock and 303 million stock options with a strike price of $26 a pop.

The majority of Musk’s wealth is concentrated in his EV company, but he also owns private social media platform X, former Twitter, and space exploration company SpaceX, among other businesses.

📍What’s Your Take?
Are you buying the dip in Tesla stock? Or are you waiting for a deeper drop before scooping up some shares for yourself? Let us know your thoughts on Tesla’s future in the comments below!

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💖 TradingView Team