Why does Tesla stock keep dropping?
Several Wall Street analysts lowered their target for Tesla (NASDAQ:TSLA) stock recently. Today, UBS analysts cut their numbers due to concerns over potential earnings downside risk. This decision comes amidst a series of challenges faced by the electric vehicle (EV) giant, including demand and production concerns.
As a result, the Tesla stock price has been under pressure in recent months, with investors questioning the company's ability to meet its targets.
Tesla shares are down over 32% in 2024 after a more than 11% decline over the past month. After a 4.5% decline in Wednesday’s session, Tesla shares have declined a further 1.4% premarket on Thursday.
As mentioned above, a few factors are impacting the Tesla share price, including demand and production concerns. Competition in China is also a factor.
In a note this week, Wells Fargo analysts described Tesla as “a growth company with no growth.” The bank cut its price rating for the stock to Underweight, saying there is a “downside risk to volume as price cuts are having a diminishing impact.”
Electric vehicle demand has dipped, and Tesla, the market leader, has felt the impact. It is also experiencing pricing competition in China from rivals such as BYD (SZ:002594).
According to data from the China Passenger Car Association, Tesla sold 60,365 China-made vehicles in February, representing a 19% decrease from a year earlier. It is also the lowest since December 2022.
However, in the US, demand is also dipping, and the company is offering incentives to entice customers into the market, such as offering free Supercharging miles. In addition, in February, Tesla temporarily lowered the prices of some of its Model Y cars.
As mentioned, Wells Fargo cut its rating for Tesla
Read more on investing.com
