Is this the end of the road for Tesla? Why TSLA stock has lost over 25%

Is this the end of the road for Tesla? Why TSLA stock has lost over 25%

  • Of all the Magnificent Seven, and even the whole S&P 500, Tesla seems to be the biggest loser right now.
  • Tesla’s stock price is down more than 28% since 1 January 2024, and it looks like it’ll slide further still.
  • We unpack some of the aspects why in this analysis.

The Tesla stock price is down more than $60, over a quarter of its share price at 28.5%, this year so far.

Where the Magnificent Seven stock once seemed invincible, now dangers are everywhere. The disruptor has become disrupted.

So, what’s going on currently to make Tesla watchers nervous?

Tesla is burning

The most recent incident of Tesla’s occurred early on Monday evening when numerous social media sources reported that the company’s Fremont factory in California was on fire.

Although the fire seemed to have been a minor one, and a minor incident in general, it was telling that Tesla themselves did not provide any update on the matter.

This tendency in the company to not provide comms does not help its stock price, generally – even when only minor disturbances occur.

On a more serious note, many have noticed a global slowdown in electric vehicle sales as hype for EVs cools.

Tesla reported deliveries of just 386 800 vehicles for Q1, a drop of 8.5% year-on-year.

Elon Musk then told Tesla staff in an internal memo in April that the company would be conducting an exhaustive round of layoffs, dismissing as much as 10% of the company’s staff, which amounts to thousands of employees.

Robotaxi trouble

This is hardly good timing for Tesla. Musk announced in an X post a while back that Tesla would be ‘unveiling’ its new robotaxi model on 8 August.

With Tesla having decided to move away from ‘Model 2’, its longtime promised lower-cost vehicle, the robotaxi stream of revenue is a vital one for Tesla.

But there’s been unfortunate news there too. In a May 20th post on Tesla’s official X account, the company seemed to ‘leak’ an image of a robotaxi work-in-progress.

The post sparked a slew of of underwhelmed or outright negative reviews criticizing the overly minimalist, verging on comfort-less, interior.

Disruptions from outside

However, that’s not all Tesla is facing currently. As we all know, no asset outperforms or underperforms in a vacuum. Usually, a factor in a once-mighty stock underperforming is that a contender has come along to make it look suddenly less attractive.

Hydrogen cars: moving the cheese?

And, as it happens, Tesla is very much facing intensified competition from one key area: hydrogen cars.

There has been a wealth of news releases in the past week relating to hydrogen vehicles.

After first being unveiled in July 2023, hydrogen-powered 4×4 Ineos Automotive gave a new offroad demonstration in the past week in England.

The United Kingdom, in general, is actively looking into hydrogen fuel cell technology, in order to make seeing average cars on UK roads being hydrogen-powered as the new norm in years to come.

In fact, according to a report, the hydrogen fuel cell market for passenger cars and vans is anticipated to be worth £596 billion by 2040 in the United Kingdom alone.

Meanwhile, Renault brand Alpine is developing a new ‘Alpenglow H4’ car, a high-performance hydrogen-powered racing car that’s in development at the company.

So, we have hydrogen technology making leaps and bounds with luxury cars, high-performance speedsters and passenger cars.

The bottom line

With troubles internally, and major competition externally, Tesla really seems to be on the ropes.

The question remains: is this the final round for Tesla as a Magnificent Seven stock? Or is it only half-time for the disruptor?

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