Tesla's stock has plummeted below $150 per share, erasing all gains made over the past year. The electric vehicle maker is facing challenges such as declining sales and significant discounts aimed at attracting more buyers. Shares of the company, owned by Elon Musk, dropped nearly 4% in intraday trading on Thursday, marking the third worst week for the stock in 2024. This year has been particularly tough for Tesla investors, with shares down 12.4% this week and over 39% for the year.
In a concerning development, Tesla announced a global workforce reduction of 10%, affecting approximately 14,000 jobs. The company also sought to reinstate Musk's $56 billion pay package, which was previously rejected by a Delaware judge due to concerns over the negotiation process. The value of Musk's package has decreased to $44.9 billion following the stock decline.
Tesla's sales took a hit in the last quarter as competition in the electric vehicle market intensified, leading to a nearly 9% drop in vehicle deliveries compared to the same period last year. Analysts, including Dan Ives from Wedbush, have expressed disappointment over the first-quarter sales figures, labeling them as an 'unmitigated disaster.'
Deutsche Bank recently downgraded Tesla's rating, citing concerns over Musk's focus on autonomous vehicles, particularly the shift towards Robotaxi. The uncertainty surrounding Tesla's future growth prospects has led to speculation about the company's ability to reverse the stock slide. Analysts were anticipating the launch of a new affordable electric vehicle, the Model 2, priced around $25,000, but reports suggest that Musk may have scrapped the project.
Despite the uncertainty, Musk has denied reports of canceling the Model 2 and hinted at unveiling a robotaxi at an upcoming event. The delay in introducing a more affordable vehicle could potentially shift Tesla's focus towards achieving full driverless autonomy, a complex challenge that could redefine the company's strategic direction.
Tesla has been forced to slash prices on some models by up to $20,000 to remain competitive amid increasing market pressures. Other automakers have also resorted to price cuts and production adjustments to stimulate electric vehicle sales. The overall growth of U.S. electric vehicle sales slowed significantly in the first quarter of the year, signaling a challenging market environment for EV manufacturers.
In addition to the workforce reductions, Tesla has witnessed the departure of two senior executives, further adding to the company's leadership challenges. Andrew Baglino, the senior vice president of powertrain and energy engineering, and Rohan Patel, the senior global director of public policy and business development, have both announced their departures from the company.
