According to a recent article published by Electrek, Tesla's market cap has dropped so much in 2022 that the losses are nearly equal to the rest of the entire legacy automotive industry as a whole. It calls the stock drop one of the most significant in history.
Tesla's stock has always been quite volatile, and while many people have made millions investing in Tesla's stock, they've also faced many scary times over the years. However, somewhat recently, it did seem like Tesla was finally set for true success.
It has been showing profits and nearly meeting or beating delivery projections for many quarters, its stock was finally welcomed into the S&P500, and it became the most valuable automaker in the world, briefly surpassing a $1 trillion market cap. During a time when most automakers across the globe have been struggling, Tesla is building factories, ramping up, and growing like a weed.
The stock market has been a bit of a mess across the board ever since COVID-19 arrived way back in March 2020. Stocks tanked and then soared, there were many roller coaster moments, and now everything just appears to be way down. However, Tesla's drop is much more substantial than that of others. In fact, it's down about 70 percent on the year.
Electrek cites Statista, noting that Tesla's market cap was a whopping $1.2 trillion on January 3, 2022. After shedding hundreds of billions in losses, the US electric automaker's market cap was just $435 billion on December 20, 2022. Statista writes:
"Shockingly, Tesla’s drop in market capitalization, roughly $800 billion from its peak, is bigger than the combined valuation of pretty much any legacy car manufacturer you could think of. As the following chart shows, the combined market capitalization of Toyota, Volkswagen, Mercedes-Benz, BMW, GM, Ford, Stellantis (Fiat Chrysler and PSA), Honda, Hyundai, Kia, Nissan and Renault is still more than $100 billion shy of Tesla’s market cap decline."
Check out the chart below, which was shared by Statista and credited to Yahoo! Finance:
This really puts things into perspective to be sure. Do you believe it's a temporary situation, or will Tesla's stock price remain much lower than it was in the past? This is definitely a topic that deserves plenty of educated conversation. Share your wisdom with us in the comment section below.
