The market capitalization of U.S. electric vehicle maker Tesla has evaporated by about 100 trillion won in just two days. This is due to a series of negative factors emerging in China, Germany, and other countries amid growing global concerns over a slowdown in electric vehicle growth.
On the 5th (local time), Tesla's stock price closed at $180.74, down 3.93% from the previous session on the New York Stock Exchange. This is the lowest closing price since May 2022. During the session, it even dropped as much as 5.6% to around $177. Following a decline of more than 7% the previous day, Tesla's stock fell nearly 4% again, now threatening the $180 per share level. Its market capitalization also shrank to $576 billion. Bloomberg reported that the market cap lost over the past two days alone amounts to $76 billion (approximately 101 trillion won).
The stock weakness on this day was directly hit by news that Tesla's German factory, the Berlin Gigafactory, halted operations due to an arson attack suspected to be sabotage. The fire is expected to halt factory operations until at least early next week, resulting in losses of hundreds of millions of euros (several hundred billion won). Additionally, the same day, Chinese electric vehicle company Nio's earnings were revealed to be weaker than expected, highlighting concerns over a slowdown in the electric vehicle market growth. The previous day, news that Tesla's Shanghai factory shipments in February fell 19% compared to a year ago had already impacted the stock price.
Matthew Potillo, an analyst at Tudor, Pickering, Holt & Co., analyzed, "Global indicators confirm that the slowdown in the electric vehicle market began in the first two months of this year, inevitably leading to downward revisions in earnings forecasts." He predicted that Tesla's shipments in the first quarter would be 466,700 units, less than Wall Street's average estimate of 474,200 units. Mark Delaney, an analyst at Goldman Sachs, also lowered Tesla's annual earnings forecast, citing margin declines due to price cuts.
Recently, investment sentiment has been focused on artificial intelligence (AI), which is also a negative factor for Tesla. Tesla's stock has shown a particularly notable decline among the Magnificent Seven, a group of leading tech stocks. The decline has reached 27% so far this year. Bloomberg pointed out that Tesla's forward price-to-earnings ratio is 58 times, much higher than Nvidia's 34 times, the AI leader, suggesting the stock price may fall further. This indicates that Tesla's stock is overvalued compared to Nvidia.
Tony Sacconaghi, an analyst at Bernstein, stated in a report the previous day, "Despite Tesla's poor returns since the beginning of the year, it is difficult to find catalysts for Tesla's stock price to rise," and questioned the company's growth narrative. According to CNBC, the average investment opinion of 48 analysts surveyed is 'hold,' with an average target price of $206.25.
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