Tesla (NASDAQ: TSLA) stock fell after Germany’s SAP canceled plans to buy electric cars from the EV giant, coupled with a lowered price target by Piper Sandler based on reduced delivery expectations for the current year.
Tesla, the electric car company led by Elon Musk, took a sharp dip on Monday, falling 3.65% to $181.06, reaching their lowest point since May 2023. Consequently, the world’s leading automaker has suffered a staggering loss of nearly $24 billion in market value.
The downward spiral began after Tesla projected a significant slowdown in deliveries for 2024, contrasting sharply with last year’s impressive 21% growth. This worrying forecast has spooked investors, leading to a continuous decline in Tesla’s stock value.
Factors Affecting Tesla (NASDAQ: TSLA)
Adding fuel to the fire, German publication Handelsblatt revealed that SAP, a prominent company, will no longer procure vehicles from Tesla due to delays in deliveries and erratic price fluctuations. This comes on the heels of similar decisions by other companies, such as Sixt and Hertz, who cited concerns over Tesla’s price cuts affecting the value of their fleets.
Furthermore, financial firm Piper Sandler also expressed concern, forecasting Tesla’s deliveries to be 1.93 million vehicles this year, reflecting a growth rate of about 7%, significantly below Elon Musk’s long-term annual target of 50% set three years ago.
In January, Elon Musk acknowledged that high-interest rates had increased monthly payments for Tesla cars, impacting their affordability.
On the regulatory front, U.S. safety regulators have escalated their investigation into Tesla vehicles, particularly regarding power steering issues, indicating a potential recall.
In a separate report, the Wall Street Journal disclosed that Elon Musk’s use of illegal drugs was known to some current and former board members of Tesla and SpaceX, casting a shadow over the company’s leadership.
Despite these setbacks, Tesla stock remains highly valued, trading at 57.75 times its 12-month forward earnings estimates compared to its peers, such as Meta Platforms and Amazon.com.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
