Tesla has been a monster stock over much of its history, especially from its stratospheric run from mid-2019 to late 2021. But in 2022, Tesla stock has been a big loser, on track to plunge 57% as of Dec. 16.
That would easily surpass 2016's 11% fall, the only other annual decline since Tesla stock came public in 2010. The sell-off has intensified, with the EV giant losing more than half its value since late September.
On Friday, TSLA stock skidded 4.7% to a fresh two-year low. The 16.1% weekly decline was the worst since the Covid crash of March 2020.
Here are some major headwinds facing TSLA stock, from Elon Musk's "Twitter circus" to Tesla demand concerns.
Tesla Stock Annual Performance
| Year | Tesla stock change |
|---|---|
| 2010 | 56.6% |
| 2011 | 6.7% |
| 2012 | 18.9% |
| 2013 | 343.8% |
| 2014 | 47.9% |
| 2015 | 7.9% |
| 2016 | -11.0% |
| 2017 | 45.7% |
| 2018 | 6.9% |
| 2019 | 25.7% |
| 2020 | 743.7% |
| 2021 | 49.7% |
| 2022 YTD | -57.3% |
Tesla Demand
A big Shanghai production increase, a weak Chinese and global economy are all raising concerns about demand, even with deliveries set to hit record highs in Q4.
Tesla cut prices in China in late October, and has announced a slew of incentives to clear out inventory. But wait times are essentially at zero.
There are consistent reports of Shanghai production cuts, though Tesla has denied them.
Tesla may be betting on a big quarter for European sales, but that could draw down backlogs heading into 2023. On Jan. 1, EV subsidies end in China and Norway, with Germany cutting subsidies substantially. Sweden has just ended its EV subsidies while the U.K. is ending its program.
Tesla is offering free Supercharger kilometers in a year-end European push, along with some temporary U.K. price cuts.
That comes as China's EV competition intensifies, with more and more models from the likes of BYD, Nio, Li Auto and more taking on Tesla's aging Model 3 and Model Y. Europe's EV market also is getting more crowded.
On the flip side, Tesla will be eligible for new U.S. tax credits of up to $7,500 per vehicle. Tesla still faces far less competition in its home market than in Europe and China. With potential buyers holding off on purchases or deliveries, Tesla is offering $3,750 off Model 3 and Model Y deliveries before year-end, along with 10,000 free Supercharger miles.
Beyond Tesla, there are concerns about EV demand around the world amid a weak global economy and high EV prices. That could slow the adoption of electric vehicles generally in the coming years.
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Elon Musk's Twitter Reign
Tesla CEO Elon Musk has owned Twitter for less than two months, but already seems like ages. He's slashed staff by half, with many other employees exiting. Advertising revenue is plunging.
Musk's tweets have become increasingly partisan, while recently suspending several reporters' accounts.
All of that has raised concern that Musk is damaging his image. Even longtime TSLA bulls fear that that is tarnishing Tesla's brand.
Musk has sold several batches of Tesla stock this year, including $3.6 billion worth over Dec. 12-14. He's cited Twitter costs on some of those share sales.
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TSLA Stock Follows EV Rivals, Aggressive Growth
Tesla stock is not doing well. But it's not alone. Aggressive stocks have had a terrible 2022. Tesla's EV rivals in particular have struggled, including Nio stock, Li Auto, Rivian and BYD. Rivian is not far from a record low, but BYD, Nio and Li stock are trending higher.
More broadly, a bear market has ruled for most of the year. While the major indexes have rebounded from October lows, the S&P 500 and Nasdaq composite are back below their 50-day moving averages, down significantly for the year.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
