Now Tesla is DUMPED by Europe’s biggest software firm as its company car – pushing shares of EV giant to 9-month low – after automaker is also snubbed by Hertz and Sixt
- German software company SAP said it would no longer add Teslas to its fleet
- The fleet manager said the fluctuating value of the cars made it risky to hold on to them
- It comes just weeks after rental companies Sixt and Hertz also cut ties
Tesla shares plunged to a nine-month low after Europe’s largest software company SAP said on Monday it would no longer buy the cars for its staff.
The German company joins car rental companies Hertz and Sixt in pulling away from purchasing Teslas, as well as electric vehicles more broadly.
A major issue for all three companies is that Tesla has cut prices on new cars, hurting their resale values. Depreciation usually represents the biggest risk for fleet managers.
The average value of a used Tesla fell by more than $1,000 in the first half of January, DailyMail.com announced last month.
Investment bank Piper Sandler also lowered its price target for Tesla shares today due to lower delivery expectations for the year.
Shares of Tesla plunged again to a nine-month low after Europe’s largest software company announced it would no longer buy cars for employees. Pictured is a fleet of newly produced Tesla electric cars in 2020
Tesla’s share price closed almost 4 percent lower on Monday at just over $181 – the lowest since May 2023
Tesla’s share price closed nearly 4 percent lower Monday at just over $181 — its lowest value since May 2023. It wiped $24 billion off the world’s most valuable automaker’s market capitalization.
The SAP fleet manager justifies his decision to ditch Teslas as a company car option for staff told the German newspaper Handelsblatt that the list prices of its cars fluctuate more than those of other manufacturers, making them a risky asset to own.
The price of used Teslas has fallen dramatically over the past year as the company cut prices on new vehicles in an effort to claim a larger share of the market.
It comes just weeks after German rental giant Sixt also announced it would stop adding Teslas to its rental fleet, also highlighting how their fluctuating value was hurting its books.
Also in January, Hertz revealed in a corporate filing that it would sell tens of thousands of its electric cars in a “fire sale.”
Meanwhile, Piper Sandler said it expects deliveries of 1.93 million vehicles this year, representing a growth rate of about 7 percent
That is well below the annual long-term target of 50 percent that Elon Musk set three years ago.
Musk said in January that high interest rates had increased monthly payments for Tesla’s cars, making them less affordable for consumers.
And on Friday, US safety regulators upgraded their investigation into Tesla vehicles amid reports of loss of steering control and power steering failure.
SAP’s fleet manager told German newspaper Handelsblatt that the fluctuating value of the cars made it risky to hold on to them
Tesla CEO Elon Musk said in January that high interest rates had increased monthly payments, making Tesla cars less affordable for consumers
That was seen as a possible step toward the National Highway Traffic Safety Administration demanding a recall.
Tesla shares are still trading at almost 60 times 12-month earnings estimates – higher than most companies.
By comparison, Meta’s valuation is 25 times higher, while Amazon is valued at just over 40 times expected earnings.
Many investors are confident in Tesla’s current valuation because of its plans to expand into “robotaxis,” which could be lucrative if the company is able to overcome the technical and bureaucratic hurdles required to make self-driving cars effective .