Tesla shares have fallen roughly 29% this year, especially below the entire S.
Today, the accumulation of unsold stock is a problem, as it may simply imply that the company is entering a downcycle, with money tied to the stock. The stockpiling means Tesla’s loose cash was negative to $2. 5 billion in the first quarter of 2024. That said, Tesla expects things to normalize in the current quarter. In reaction to the increase in inventories, Tesla implemented discounts on the value of its production cars and charged more for traditional models. For example, the long-range and functional versions of the model. And you recently won discounts of $5,000 or more. In addition, Tesla’s production process is also highly automated, which could help the company better adjust its production as needed in the future. Tesla will most likely rely on increasing sales of self-driving software and the deployment of synthetic intelligence equipment to drive long-term profit growth.
Today, TSLA’s inventory has faced a remarkable 25% drop from $235 degrees in early January 2021 to around $175 now, with an increase of about 45% for the S.
We continue to affirm that Tesla will continue to be a wonderful beneficiary of the long-term transition to cleaner transportation and energy production, given its well-oiled supply chain, incredible battery and transmission technology, and leadership in autonomous driving software and technology. That said, the company will most likely see deliveries and profits under pressure this year, well below the company’s multi-year target of 50% annual growth in profits.
Several factors contribute to the drop in demand for Tesla vehicles. High interest rates have made it more expensive for consumers to finance the purchase of a vehicle. Additionally, the lack of extensive charging networks in many countries and the declining resale cost of electric cars are likely to deter potential buyers. The market for early adopters of electric vehicles is also likely to become saturated, leading to a decline in demand. The effect of competitive price cuts implemented by Tesla over the next year is also waning, while the festival becomes more intense, especially in markets like China, where local brands offer a range of compelling electric vehicles. Tesla’s pricing strength appears to be declining, which is impacting its average advertising values. In the first quarter of 2024, the average value of Tesla cars fell to less than $45,000, compared to around $47,000 in the same quarter last year. We price Tesla stock at $177 per share, which is roughly the current market price. Check out our research on Tesla Valuation: Is TSLA Stock Expensive or Cheap? for more key points on Tesla’s valuation and how it compares to its peers. For more insights into Tesla’s business style and profit trends, check out our Tesla Income Dashboard: How Does TSLA Make Money?
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