Tesla’s Stock Tumbles Amid Sales Worries and Market Volatility

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Tesla’s Stock Tumbles Amid Sales Worries and Market Volatility

Sergio Rodriguez, a St. Marys, Georgia consultant who owns a Tesla Model X, recently drove a Mach E across the country. Rodriguez said he planned to keep his Model X despite some serious quality issues and slow responses from Tesla that he described in YouTube videos and on electric vehicle websites.

“I still love the Model X. In terms of performance, you want a thrill,” he said. “But you have to accept that there are many imperfections. The Mach E is definitely built with quality and it’s cool. You can’t help but see when it goes by. “

Last month, Ford sold 3,739 Mach E, a tiny number compared to the tens of thousands of pickups the company sells each month but which are respectable for an electric car. Volkswagen is slated to begin delivering its ID.4 electric SUV in the United States this month. General Motors recently updated its compact electric car, the Chevrolet Bolt, to introduce a larger version of the car with higher driveability.

Whatever the competition, Tesla has enough cash to finance its business for some time. The company capitalized on its soaring share price last year by selling more than $ 12 billion in new shares to investors and had more than $ 19 billion in cash by the end of 2020. Tesla spent $ 1.5 billion on Bitcoin earlier this year, and even if the company takes huge losses on that bet, it will still have significant cash on hand.

The company, which didn’t respond to a request for comment, has come a long way from the dark days of 2018 and 2019 when some analysts wondered if it would survive as an independent company. Mr Musk struggled to ramp up production of Tesla’s most affordable car, the Model 3, and described the company’s troubles as “manufacturing hell”.

Despite the recent decline, Tesla’s stock price is still over 300 percent in the past 12 months. And its market value is more than the combined market cap of Toyota Motor, Volkswagen, Daimler, GM, and Ford – companies that sell a lot more cars than Tesla.

Of course, every time a company is valued by a multiple of its peers, it can be prone to a sell-off if investors have the slightest doubt. Even after the stock fell from its peak, Wall Street is extremely bullish on Tesla. The stock trades at 144 times earnings analysts have expected the company to be this year, a stratospheric valuation. Much hope in the market is that Tesla has a large chunk of a much larger electric vehicle market, which is why analysts expect the company’s profits to more than double by the end of 2025.