Elon Musk’s Tesla, once hailed as the vanguard of the electric vehicle revolution, is facing mounting doubts about its ability to sustain growth and maintain its dominance in the increasingly competitive EV market. With its shares down 32 percent since January, the electric vehicle giant is the worst performing stock in the S&P 500 so far this year.
CNN reports that Elon Musk’s Tesla, which once symbolized the future of automaking, is now grappling with questions about its own future. The once red-hot electric vehicle maker, heralded as part of the so-called “Magnificent Seven” tech stocks, has become the worst performer in the S&P 500 this year, plunging nearly 32 percent since January.
Elon Musk’s Halloween costume (Taylor Hill /Getty)
The story of Tesla’s decline has been well-documented, with the company plagued by safety issues, recalls, slowing growth, and even forced price cuts. However, a recent report by Wells Fargo analyst Colin Langan paints an even darker picture than previously imagined, describing Tesla as a “growth company with no growth.”
Langan predicts that Tesla’s growth will remain flat this year and then decline in 2025 as competition intensifies, deliveries disappoint, and the beleaguered automaker is forced to slash prices once again. UBS has also downgraded its forecast for Tesla, citing concerns over slowing demand for electric vehicles and the increasing market share of Chinese rivals.
While most of the Magnificent Seven companies, including Apple, Amazon, Mark Zuckerberg’s Meta, Google, Nvidia, and Microsoft, reported double- or triple-digit earnings growth in the final three months of 2023, Tesla reported a staggering 40 percent decline in profit from the year before.
Tesla finds itself navigating a perfect storm, with the EV environment becoming increasingly crowded just as the company’s fundamentals have come into question. Its share price has dropped about 60 percent from its 2021 all-time high of $407, and analysts believe that even with the recent drop in price, Tesla’s stock is still very expensive when compared to its actual earnings and profits.
According to Langan, Tesla’s former propensity for rapid growth is no longer certain, and shares likely have further to fall. Wells Fargo has lowered its price target for the stock from $200 to $125, predicting another 25 percent decrease in value, while UBS has lowered its price target to a more moderate $165 from $225.
Read more at CNN here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
