The stock dropped more than 15% over the last few days after the company posted third-quarter earnings on Wednesday 20th October 2023.
The earnings report showed that Tesla missed analysts’ expectations on revenue and earnings per share. Tesla also announced a recall of 475,000 vehicles in the US due to a potential battery fire risk.
Additionally, Tesla faced regulatory challenges in China, where it was banned from selling its AI chips due to national security concerns. These factors contributed to the negative sentiment around Tesla stock and increased its volatility.
Tesla stock has fallen 73% from its record high in November 2021. The stock is down 69% in 2022, more than double the decline in the Nasdaq.
Tesla price crossed below 200 day moving average this is a bearish indicator.
Among major carmakers, Ford is down 46% and General Motors has fallen 43%. Since its IPO in 2010, Tesla has only fallen in one other year, an 11% drop in 2016. Some analysts and investors are still optimistic about Tesla’s long-term prospects, citing its innovation, leadership, and loyal customer base.
However, others are sceptical about Tesla’s valuation, profitability, and competition. Tesla’s stock performance in the coming months will depend on how it can overcome its current challenges and deliver on growth.
Don’t underestimate Elon Musk, but bear in mind other big car manufacturers are now catching and moving ahead of Tesla in the EV race.