Tesla Stock Price Down 25% In 2024, Time To Take Your Profits
Tesla Inc. has experienced a significant decline in its stock price, with a 25% decrease in value throughout 2024. This decline comes as a result of missed expectations and a lower guidance report in Tesla’s latest earnings statement. The company’s stock fell by 10% during early trading on January 25, prompting analysts to lower their price targets for Tesla’s stock.
One of the key reasons behind the advice to sell Tesla stock is the company’s weak customer value proposition. Additionally, CEO Elon Musk’s increased focus on AI and robotics has raised concerns among investors. These factors indicate that holding on to Tesla shares may result in losses for investors.
The recent fourth-quarter report provided by Tesla was disappointing, and the company delivered weak guidance for the year 2024. Musk, during Tesla’s earnings conference call, made what some consider to be lame excuses, including touting the company’s push into robotics. However, competition in the robotics industry is robust, with rival companies such as Boston Dynamics, Agility Robotics, and Figure vying for market share. This raises doubts about Tesla’s ability to make a significant impact in this sector.
Furthermore, Tesla faces significant challenges in the electric vehicle (EV) market. Gasoline prices have dropped, posing a disadvantage for EV makers. Tesla’s relatively high prices, long charging times, and range anxiety are also detriments in comparison to other EV manufacturers. The company’s decision to focus on the overpriced Cybertruck, rather than manufacturing affordable EVs like Chinese giant BYD, has put Tesla at a competitive disadvantage.
Tesla’s delayed plans to produce less expensive vehicles until the second half of 2025 in Austin and then Mexico further underscores this disadvantage. Musk acknowledged the challenging production ramp for the next-generation vehicle but expressed confidence in the superior manufacturing technology it would employ. However, this move is still years away, leaving Tesla vulnerable to increasing competition in the EV market.
Another concern is Musk’s distractions from Tesla. His recent acquisition of Twitter and his interest in building a Generative AI rival to OpenAI have raised questions about his commitment to the electric car manufacturer. Musk’s desire to increase his stake in Tesla from 13% to 25% indicates his intentions to prioritize AI and robotics over addressing Tesla’s existing issues.
Analysts are not optimistic about Tesla’s prospects, and several brokerage firms have revised their price targets for the company’s stock. Barclays, RBC, and Canaccord Genuity have all reduced their price targets, reflecting the uncertainty surrounding Tesla’s future growth.
In conclusion, investors are advised to consider taking their profits and selling Tesla stock due to the company’s weak customer value proposition, CEO Elon Musk’s distraction with AI and robotics, and the competitive challenges faced by Tesla in the EV market. The decline in stock price and revised price targets from analysts indicate potential losses for investors who choose to hold on to their Tesla shares.
