Tesla Stock Plummets as Chinese Competition and Sales Concerns Mount
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Tesla shares dropped 12% on Thursday, losing $82B in market value, due to Elon Musk's warnings about competitive Chinese automakers and slower than expected sales growth forecasts.
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Tesla recently lost its spot as the world's top EV maker to Chinese company BYD, which keeps costs low by controlling its supply chain.
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Governments are exploring raising tariffs on Chinese EVs as they dominate the global market, with accusations of anticompetitive behavior.
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Tesla plans to compete in the low-cost EV market starting in 2025, but its high-end success may not translate downmarket where Chinese automakers rule.
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For Tesla's stock to recover its value, its profits would need to increase 5x over 7 years to $40B annually - a steep climb according to its latest earnings.