Shares of Tesla Inc. (TSLA) had a rough day on Monday, ending nearly 5% lower than their previous close. This marks the lowest closing price for the stock since May 26. The downward trend began after the company reported its third-quarter results earlier this month, and it seems to be continuing.
A Steep Decrease
Monday’s drop in Tesla stock also represents the largest one-day percentage decrease since October 19, which was the day after the earnings report. Investors are growing increasingly concerned about the company’s newest model, the Cybertruck, and how long it will take for Tesla to achieve volume production for this electric pickup truck.
Adding to the worries on Monday was news that Japan’s Panasonic (6752), a battery partner for Tesla, is reducing its domestic battery production. The company cited slower sales to Tesla as the reason for this cutback. This development has further shaken confidence in the overall demand for electric vehicles (EVs).
Premium Pricing Problems
Last week, Ford executives revealed that EV owners are not willing to pay a premium for EVs over traditional internal combustion-engine cars. This statement only added to the concerns surrounding the future of EV sales.
Despite these recent setbacks, Tesla has actually seen substantial gains this year, with a 60% increase so far. This is in stark contrast to the gains of around 9% seen by the S&P 500 index.
In conclusion, Tesla is facing some significant challenges in the market. The downward trend in their stock price, coupled with concerns about the Cybertruck and reduced battery production, have caused investor confidence to waver. However, it’s worth noting that Tesla has still experienced impressive growth in 2021 compared to the broader market.