Tesla's shares fell by more than 15% during the last few days, with the closing price of $211.99 on the week. This was due to Elon Musk's negative remarks about the economics of the market during the third-quarter earnings call on Wednesday. This is the worst week reported for Tesla stock during the year, though the company's share prices remain 96% higher than the beginning of the year.
Tesla's shares plummeted over 15% in the last few days, closing the week at $211.99, following CEO Elon Musk's pessimistic remarks regarding macroeconomic issues during the third-quarter earnings call held on Wednesday. This marks the worst week of the year for Tesla stock, though it has still gone up by 96% in the span of this year. The company reported $23.35 billion revenue and $1.85 billion in profits for the period ending September 30th, which is lower than that of the same quarter in the preceding year.
Musk, who is known to divide his time between Tesla, X (formerly Twitter), SpaceX, xAI, Neuralink, and The Boring Co., showed great concern for the economy and reiterated his plan about cost-cutting and price reductions. Moreover, he dampened shareholders' hopes regarding the long-awaited Cybertruck project, while staying tight-lipped about the so-called 'robotaxi' and autonomous vehicle technology, which the firm has been working on for years. Elon even went on to say that "We dug our own grave with Cybertruck" on the call. He reminded everyone to not have too high expectations from the product but also stated that, "Demand is off the charts. We have over 1 million people who have reserved the car, so it's not a demand issue," while adding that they would need to make it at a price people could afford. Tesla is planning to officially launch the Cybertruck on November 30th, though the specifications and pricing is still unknown.
Tesla's CFO Vaibhav Taneja expressed his concern during the call and emphasized the need to reduce costs and consequently the cost of their electric vehicles for customers. Musk too voiced his worries about the "high-interest rate environment", which poses the risk of people being unable to buy the cars as it might become too expensive for them. To counter this challenge, the company decided to focus more on cutting costs.
Musk made some optimistic claims stating that the company would continue to invest in AI and cycle development, which could potentially make Tesla the most valuable company in the world. But, the market didn't take too kindly to this and some analysts were very cautious in their outlook after the Q3 results. Analysts like Wells Fargo's Colin Langan, Morgan Stanley's Adam Jonas, and Bernstein's Toni Sacconaghi all issued wary notes after the call, and the latter even gave an underperform rating to the stock with a $150 price target, implying a 38% downside. Jonas, on the other hand, suggested that it is also important to take into consideration the long-term potential of the products and services Tesla is offering.
With Chinese EV makers witnessing a drop in their stocks as well post Tesla's call, it has become clear that this was an alarm bell signaling a difficult future for electric vehicles.
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