Following the company’s announcement on Thursday that this year’s sales growth will be slower than in 2023, Tesla’s stock dropped more than 12%, according to the BBC.
As a result, Tesla’s stock value has dropped by about $80 billion.
Elon Musk, the CEO of Tesla Motors, predicted that the company’s sales growth “may be notably lower” in 2024 despite decreasing prices.
The carmaker’s quarterly earnings, which were made public on Wednesday, likewise failed to meet expectations from Wall Street.
In order to maintain its competitiveness in the face of intense competition from Chinese rivals like Build Your Dream (BYD) and automakers, the company has been cutting prices in key international markets including China and Europe.
Demand has also decreased due to the ongoing high cost of borrowing, which is a result of central banks around the world keeping interest rates high to combat inflation.
Tesla claims that its profit margin has decreased as a result of price reductions, higher R&D costs, and costs associated with stepping up manufacturing of the new Cybertruck.
In addition, the company announced that it was “between two major growth waves” and that it will start manufacturing a new, less costly vehicle in the latter half of the next year.
Furthermore, Musk cautioned investors that Chinese competitors “will pretty much demolish most other car companies in the world” if trade curbs are not put in place.
After years of explosive growth, Tesla has issued a slowdown warning, citing a global decline in demand for electric vehicles as the reason.
The value of Tesla’s shares has currently decreased by more than 25% so far this year.
