Tesla shares feel the pain in worst year ever; 2023 may be almost as bad
Once upon a time not so long ago, Tesla shares were among the most prized of possessions for both an avid market watcher as well as the casual stock market player. Prices were high. And climbing. Much to cheer. But then came year 2022 when the proverbial bubble burst and Tesla share prices crashed and have nearly burnt.
At the end of Tuesday's trading, Tesla shares had - overall - fallen by more than 60 per cent and is on its way for a record decline to close what may well be a nightmarish year for Tesla investors. After all, around $626 billion of shareholder value has been erased - an epic rise and fall in the two years since the company entered the S&P 500 Index. And it is around 40 per cent lower than the level at which it had joined the benchmark.
Not everything Tesla is gold
The performance of Tesla stock has been a result of a wide variety of factors - from CEO Elon Musk concentrating on Twitter and his antics there since the takeover to driver software-related issues and production timelines, the glare has been intense. Timelines related to battery technology and Cybertruck launch have been pushed back either once or multiple times. And with demand for more affordable electric vehicles (EVs) set to rise in coming times, rivals have a shot at the crown that Tesla tends to brandish quite proudly.
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Tesla on a giddy high
Tesla is mostly still seen more as a tech company than an automotive company - and that's not necessarily a bad thing. For a company that manufactures EVs, it is worth almost $44 billion and far richer than any other car maker. Toyota comes in next at around half that figure. The valuation for Tesla is still very much in the bright shade of green and potential rise in demand for EVs holds it in good stead. But Tesla has extremely lofty ambitions and there are doubts if it can come good on these stated dreams. One of these is to roll out 20 million units each year by 2030. This is audacious, say fans. This is outlandish, say critics. Is there a plan, ask analysts.
Tesla is expanding its market base but is still missing from certain key markets - especially India and those in Latin America. Musk has previously spoken of an EV that's more affordable than the most affordable Tesla at present - Model 3. But not much is known of it yet. In the meantime, the company is also facing massive heat in China, the world's largest auto and EV market. Local players are catching up and catching up fast while a spate of accidents have put Chinese regulators on the hot heels of Tesla too.
As the calendar year turns then, will Tesla's fortunes turn as well? Musk wants ‘someone foolish enough’ to take the role of Twitter head from him but is he determined enough to re-focus on Tesla? Time will tell.
(With inputs from Bloomberg)