Tesla’s stock has taken a significant hit this year, down 31% as of April 12. With only 3.88% of the company’s shares sold short, some believe that the stock is overpriced due to disappointing vehicle deliveries and revenue forecasts. Tesla’s operating margin dropped significantly, and its first-quarter 2024 vehicle deliveries fell below analysts’ expectations.
Consumers are becoming more value-sensitive, opting for lower-cost electric vehicles as gasoline prices fall. Chinese rivals such as BYD and Li Auto are gaining market share in China by offering EVs at competitive prices. While Tesla’s Model 3 and Model Y dominate deliveries, pressure is mounting for the company to introduce a lower-cost model to compete with its rivals.
Tesla’s pivot to Robotaxis as a revenue growth strategy may not be successful, as the company lags behind industry leader Waymo in launching a fleet. Tesla’s self-driving technology has also faced criticism, as the Full Self-Driving system requires drivers to maintain attention on the road. Musk’s promises of a million robotaxis on the road by 2020 have not materialized, casting doubt on the company’s ability to deliver on its robotaxi business.
Analysts are expecting Tesla to address its growth strategy and revenue growth in its upcoming financial results. With an average 12-month price target of $196.72 per share, analysts are unsure of the company’s future prospects. The stock price target may fluctuate based on Tesla’s ability to deliver on promises such as the Model 2 launch in late 2025 and competing in the sub-$30,000 electric vehicle segment, as well as clarity on the growth strategy in China.
Tesla investors may be skeptical of Musk’s promises surrounding the robotaxi business, as the company reportedly lacks the necessary state regulatory permits to operate a fleet of robotaxis. Musk’s enthusiasm for new projects such as the Optimus robot and the Cybertruck may distract from the company’s financial performance. Analysts are closely watching for any updates on Tesla’s growth strategy and revenue growth in the upcoming earnings call.
Overall, Tesla’s stock performance in 2024 has been disappointing, leading to questions about the company’s ability to meet investor expectations. With competitors offering lower-cost electric vehicles and doubts about the success of the robotaxi business, Tesla faces challenges in maintaining its position as a leader in the EV market. Investors will be watching closely for updates on Tesla’s growth strategy and revenue growth in the coming months to determine the company’s long-term prospects.
