Concerns over management leadership – and production slowdowns – have pushed Tesla’s share price lower. Some analysts say further declines are imminent.
For the second time in a week, the value of Tesla stock has dropped by more than 10 per cent in a single day of trading, due to a combination of lower production output and a growing loss of confidence in company management.
On Monday, news outlet Reuters reported Tesla plans to reduce output from its factory in China in January, sparking panic in investors that demand for the electric vehicles may be waning.
Production at the Shanghai plant is scheduled to be stopped for 11 days from 20 January 2023, according to Reuters, citing Chinese new year celebrations for the reduced working period.
It’s understood Tesla has not paused production for Chinese new year celebrations in the past.
The share price of Tesla dropped on Tuesday to $US109.10, and is the second time in a week it has dropped by approximately 11 per cent during day trading – with the company losing half its value in three months.
Last week, the share price took a dive after CEO Elon Musk sold shares in Tesla, with many prominent investors publicly sharing their concerns over Mr Musk’s involvement in social media company Twitter.
MORE: Tesla’s share price plummets, Elon Musk promises no more selling … again
Earlier this month, Roth Capital senior research analyst Craig Irwin told US news network CNBC he thought Tesla was overvalued, and should not be priced at more than $US85 a share.
“I’ve seen Tesla as egregiously overvalued for about a year and a half,” Mr Irwin told the TV network.
“Elon Musk is a very talented executive; Tesla is a very important company … [but] it shouldn’t be worth more than Toyota.”
By market capitalisation, Tesla is currently worth $US345 billion – with more than $US50 billion wiped off its value in five days – while the world’s largest automaker by volume, Toyota, is worth $US187 billion.
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