It appears to be getting worse for Tesla overseas, so how will Malaysian sales be affected?
To absolutely no one’s surprise, the electric vehicle (EV) brand that started the craze, Tesla, saw its stock take an 8 percent dive this month which meant its value has now dipped below USD 1 trillion (roughly RM4.4 trillion).
To make matters worse, the European Automobile Manufacturers Association revealed that Tesla’s sales in Europe fell by 45 percent, contrasting with a 37 percent rise in overall electric vehicle (EV) sales in the region. This drop in sales highlights the challenges Tesla faces after experiencing a decline in global deliveries last year.
Moreover, this decline has raised concerns among investors, putting additional pressure on CEO Elon Musk to deliver lower-priced models and autonomous vehicles, both of which Musk has touted as key to Tesla’s future success.
As a result of this dip, Tesla’s stock price dropped to USD305 (about RM1,359) per share, lowering the company’s market capitalization to USD981 billion (roughly RM4.3 trillion). Despite this, Tesla’s market value remains more than twice the combined total of major car manufacturers, including General Motors, Ford, Volkswagen, Toyota, Hyundai and BMW.
Some investors are also concerned that Elon Musk’s other commitments could be detracting from his focus on Tesla. Musk has been overseeing a substantial downsizing of the federal government, under the direction of U.S. President Donald Trump, which may be distracting him from managing Tesla effectively.
On top of that, Musk also heads SpaceX and other private ventures, which could be spreading his attention thin. Art Hogan, Chief Market Strategist at B. Riley Wealth, expressed concerns, saying, “If you’re spending that much time in an office in the White House, how much time are you spending running all of your other companies, including the one that’s publicly traded?”
Another factor affecting Tesla’s stock price is concerns over the company’s potential over-investment in artificial intelligence (AI). This is a wider issue affecting tech companies, including Microsoft and Meta Platforms, ahead of AI chip giant Nvidia’s upcoming quarterly report.
Currently, Tesla’s stock is valued at 112 times expected earnings, well above its five-year average price-to-earnings (PE) ratio of 93. In contrast, Ford and General Motors are valued at just 8 and 7 times earnings, respectively.
Despite these challenges, Tesla enthusiasts remain optimistic, pointing to Musk’s plans to launch a more affordable electric vehicle and his promises to introduce a paid autonomous car service. Although Tesla’s stock price has dropped 24 percent year-to-date, it has still risen 51 percent over the past year.
We got all this from Reuters and their full article is linked here. Thank you Reuters for the information and images.
