Tesla’s Stock Has Hit the Skids

Shares are at a 15-month low amid a pile-up of bad news, as analysts call for a course correction, and production woes continue to mount.

Photo of a Tesla Supercharger
Photo by Jakob Härter via CC BY-SA 2.0

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

Tesla is stuck in reverse.

Ahead of its earnings report next week, the preeminent EV maker saw its share price sink to a 15-month low on Thursday amid a pile-up of bad news, as multiple analysts call for a serious course correction, and production woes continue to mount. Meanwhile, Elon Musk — ever the reader-of-rooms — is fighting to secure a massive payday.

Paradise Lost

Tesla’s stock is down nearly 40% this year, due to a sizable sales dip and production slowdown. But as longtime observers know, between Tesla and Musk, there’s always something big on the horizon — especially when the company happens to be on the skids. With bad vibes abounding, Musk announced earlier this month that his ever-wandering attention has now shifted largely toward robotaxis, with a formal announcement to come in August (Musk’s announcement came shortly after claiming Reuters was “lying” when it reported Tesla would soon go all-in on robotaxis). The robotaxi hype also came just as the company settled a high-profile wrongful death lawsuit concerning the efficacy and safety of its autopilot software.

But the pivot to robotaxis is exactly that: a pivot at the expressed expense of producing the long-promised low-cost Model 2. Many investors have counted on the planned car as Tesla’s true path to EV market-share dominance. In forgoing the Model 2 for robotaxis, Tesla has invited plenty of skepticism:

  • In a note Thursday, analysts at Deutsche Bank downgraded Tesla’s stock to “Hold” and cut its price target to $123 (it’s at about $150), writing, “We view Tesla’s shift as thesis-changing… with investors previously focused on Tesla’s EV volume and cost advantage potentially throwing in the towel, and eventually replaced by AI/tech investors with considerably longer time horizons.”
  • Barclays analyst Dan Levy added to the choir, writing “The ‘rational’ bull case argument for Tesla is primarily based on the expectation that it will see an iPhone style consolidation of the auto market outside of China,” and noting that robotaxi’s represent a “very long-dated opportunity.”

Pay Day: All the while, Musk is still looking to persuade shareholders to re-approve his $56 billion payday. The compensation package had been blocked earlier this year when a Delaware court ruled that Musk effectively controlled the company’s board compensation committee. We’re thinking it might be a tough sell.

Cyber Crash: Meanwhile, Tesla’s Cybertruck — long an ever-on-the-horizon promise — has finally landed, if not with a thud then with a long-lasting bout of hiccups. The company has reportedly already halted deliveries for the product line amid reports that its accelerators seem, well, a touch sticky. Maybe that’s what the company means when it calls its autopilot feature “full self-driving.”