Tesla Shares Slip as the EV Leader Handles a Long List of Obstacles
Trouble seems to be coming from all sides for Tesla. Where will that leave the people looking to buy electric vehicles?
Written by Andrew Koole
Reviewed by Kathleen Flear
The electric vehicle revolution might be well on its way, but the last two months have not be kind to the new sector of the auto industry. Startups that jumped onto the stock market last year have seen their shares lose up to 75% of their value.
Newcomers aren’t the only ones seeing hard times. Industry leader
Tesla
had an impressive first quarter but has also lost about 35% of its stock value since its CEO, Elon Musk, started trying to buy Twitter. Tesla’s strong position in a struggling industry
Tesla reported record deliveries and earnings in the first quarter of 2022. But even as the company’s success reached the news, Musk and other EV CEOs were sounding the alarms over their struggles to acquire materials.
The chip shortage has received the most attention, but access to and prices for other electric car components, especially the precious metals need for battery production, are also blocking EV makers from keeping up with demand.
On top of that, Tesla is dealing with a number of controversies, from investigations into its advanced driver-assistance features from the National Highway Traffic Safety Administration (NHTSA) to lawsuits and allegations of racism from former employees.
MORE: Has Tesla Already Peaked?
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Is Elon Musk becoming a liability for Tesla?
Tesla’s CEO, Elon Musk, has always been a bit of a loose cannon.
While the richest person in the world has helped guide the EV builder to the top position it holds today, not all of his actions have benefited the company responsible for earning him most of his wealth—his Twitter feed offers plenty of examples.
Musk has been especially erratic in 2022, specifically in April, when the CEO started his hostile takeover of the aforementioned social media platform.
Tesla’s investors have reacted by selling enough shares to dramatically drop the company’s value, a trend the
Washington Post
says increased momentum when Musk put 50% of his shares down as collateral in the deal. Since mid-April, the company has lost $342 billion. How does all this affect Tesla ownership?
For Tesla drivers, the tumbling stock prices might not be that much of a concern. The company’s output and infrastructure is already so well established that the company’s recent losses probably won’t affect people already plugged into the brand.
For people looking to get into a Model 3, S, or Y, it might be a different story. Depending on how low the stock goes, it could force the company to put a hold on its production-scaling plans. That would in turn prevent Tesla from bringing its price back down to the $35,000 marker.
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4.7
