Tesla Share prices have recently taken a hit. The stocks have declined by 45% in the last three months following a record-high market value. This drop in share can be associated with several key factors. Let’s find out those in the article today.
Key Factors for Tesla Stock Decline
Tesla has recently faced challenges in maintaining its sales momentum specifically in new models like Cybertruck. It was sold far below projector numbers. This decline in sales has directly impacted the profitability of the company.
Secondly, Tesla is also facing increased competition from other car makers like BYD, a Chinese company that is currently thriving hybrid vehicle business. BYD sales have already outranked Tesla. However, the company has less market capitalization than Tesla.
Tesla’s valuation has been heavily influenced by optimistic expectations for future techs like self-driving cars. But the delay in realizing these technologies has led to a disconnect and the company’s future projections also took a hit because of this.
Elon Musk’s political involvement also raising concern among investors. His political engagements have led to perceptions that he is distracted from focusing in the core business. Also the proposal to end EV subsidies could further impact Tesla’s revenue. Though Elon argues this would only affect competitors more.
Despite all these challenges Tesla is valued significantly higher than the traditional car markers. This is the reason behind some investors still taking long-term bet in the company and its innovative potential.
