Tesla's Uneasy Rebound After Losing Ford's Market Cap in a Day

[Asia Economy Reporter Yujin Cho] Tesla's stock price, which experienced a sharp decline from the first trading day of the new year, rebounded successfully in just one day, but market expectations are lowering. Due to a delivery shock and intensified competition in new car launches, there are many negative factors this year as well, leading to the view that Tesla's stock price will not escape the downward trend seen last year.

On the 4th (local time) in the US Nasdaq market, Tesla's stock price closed up over 5% as a rebound buying trend emerged following the sharp drop the previous day. Tesla's stock closed at $113.64, up 5.12% from the previous session. Tesla's stock, which plunged over 12% the day before, lost $47 billion (about 60 trillion won) in market capitalization in just one day. This is comparable to the total market capitalization of US automaker Ford, which was $48 billion as of the closing price on the 4th.

Tesla, the leading automaker and symbol of growth stocks, saw its stock price plunge nearly 70% last year. At the beginning of last year, Tesla's stock price was hovering around $400, but amid sluggish performance in its core electric vehicle business and the reckless acquisition of Twitter, 'owner risk' became prominent, quickly eroding market trust. By the close on the 30th of last month, the stock price had fallen to $123.18.

(Image source: Tesla)

Matthias Schmidt, a German automotive market analyst, stated at the DealBook Conference hosted by the New York Times (NYT) that "electric vehicle companies including Tesla will face a tough market competition environment this year," and presented four reasons why Tesla's stock price is bound to fall further this year. Amid rising interest rates and a recession causing overall cracks in vehicle demand, competitors such as Ford Mustang Mach-E and Volkswagen ID3 have lined up new electric vehicle launches, intensifying competition.

In Tesla's stronghold, the US market, Ford, General Motors (GM), and Hyundai are rapidly eroding Tesla's market share. With GM's luxury brand Cadillac and Nissan also joining the competition, Tesla's ability to maintain its market position is expected to become even more difficult. Furthermore, incentive policies are decreasing in major European markets such as the UK, Germany, and Sweden, and in key growth regions for the company like China and Japan, domestic companies are being supported, leading to analyses that Tesla's competitiveness has reached its limits.

Wall Street is also pessimistic. After Tesla announced that its electric vehicle deliveries fell short of Wall Street expectations, at least four Wall Street investment firms lowered their target prices and future earnings estimates. Goldman Sachs predicted further stock price declines, stating that Tesla failed to meet sales targets despite heavy discounts to clear inventory. Morgan Stanley analyzed that Tesla's operating profit will decrease compared to the previous year. JP Morgan lowered its target price to $125, anticipating a reduction in Tesla's margins.

This content was produced with the assistance of AI translation services.