Tesla’s value fell over 12% on Thursday after CEO Elon Musk warned sales growth would slow this year despite price cuts that have already hurt margins and fueled investor concerns about soft demand and Chinese competition, Reuters reported.
Musk had said on Wednesday growth would be “notably lower” as Tesla focused on a cheaper, new electric vehicle to be made at its Texas factory in the second half of 2025, which is expected to spark the next boom in deliveries.
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But he said ramping up production of the new model would be challenging because it would involve cutting edge technology.
Reuters said Tesla’s stock suffered its sharpest intraday percentage loss in more than a year, with US$80bn in market value wiped out on Thursday. That pushed its market capitalisation loss for the month to about $210bn.
Shares of other EV makers also fell, with Rivian Automotive, Lucid Group and Fisker down between 4.7% and 8.8%.
The EV industry has been grappling with a slowdown in demand for more than a year and the Tesla price cuts will likely worsen the pressure on the startups and automakers such as Ford.
“The problem for Tesla is any significant attempt to boost sales from here on will probably need to be achieved at the cost of further falls in operating margin, due to having to compete with BYD in China, as well as increased competition elsewhere,” Michael Hewson, chief market analyst at CMC Markets, told Reuters.
