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Elon Musk’s Tesla loses US$94 billion in market valuation as winter sets in for global electric vehicle market
- Tesla’s losses in the first two weeks of this year have come from a barrage of negative news, including another price cut for its made-in-China cars
- The US carmaker has been cutting prices on its vehicles aggressively since early last year in an effort to boost demand
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Tesla had a blockbuster 2023, as its shares more than doubled in 12 months. But 2024 is starting on a different note, with Elon Musk’s electric vehicle (EV) maker off to its worst start to any year – ever.
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The company has lost more than US$94 billion in market valuation in just the first two weeks of this year. It is not hard to figure out why, as the Austin, Texas-based EV maker has been pounded by a barrage of negative news: an about-face on EVs from the car rental giant Hertz Global Holdings, yet another price cut for its cars made in China, and signs of rising labour costs.
All of this comes in the face of slowing growth in demand for EVs, especially in the United States.
“Investors’ main concern on Tesla is stagnating growth,” Cowen analyst Jeffrey Osborne said in an interview. The price cuts in China only fan those concerns, because it is starting to look like “a race to the bottom for the EV industry given intense competition in that market”.
The hit to Tesla’s market capitalisation to start the year is the biggest the company has seen over a similar period since it went public in 2010. In percentage terms, Tesla’s 12 per cent drop since the start of January is the worst since 2016, when the stock fell 14 per cent over the first nine trading days of the year.
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