Tesla market value plummets $143 BILLION in just 26 days after poor EV sales

>

Tesla has lost $143 billion in market value in the past 26 days as Elon Musk announced aggressive price cuts and failed to meet predicted Q1 delivery rates.

The company has slashed prices seven times this year, with the latest being the Model Y which is now cheaper than the average US vehicle – it now costs $46,990, $759 less than the typical car or truck.

And the previous cut was the $62,990 Model 3, which saw a drop of $22,000.

Tesla was also expected to ship 432,000 vehicles this quarter, but fell short by more than 9,000 units.

Aggressive budget cuts and low delivery rates in the first quarter likely caused shares of the company to plummet from $207 on March 31 to $160.67 when markets closed on Tuesday. It currently sits at $155.42.

The dramatic fall in shares also comes as major Tesla investors wrote an open letter to the board demanding that they keep the “overcommitted” Musk on the short end of the stick.

Shares of Tesla fell dramatically from March 31 to Tuesday. This led to a market valuation loss of about $143 billion – from $657 billion at the end of last month to about $513 billion

Last week, the company posted its lowest quarterly gross margin in two years, missing market estimates as it aggressively cut prices in markets like the United States and China to boost demand and fend off increasing competition.

Wedbush Securities Managing Director Dan Ives told DailyMail.com: β€œThe price cuts on Model Y/3 have been aggressive over the past month, meaning near-term margin pain for long-term demand growth.

The Street is concerned about this strategy as a price war erupts in Tesla’s core market in China, which has weighed on equities after a fast start to the year.

“We believe Tesla shares are oversold here, and this will be the comeback kid in the remainder of 2023 as EV demand rises and prices stabilize for Musk & Co.”

The plummeting shares caused the $143 billion loss in value for investors, Business insiders reports.

And because of this, the market valuation fell from $657 billion at the end of last month to about $513 billion.

Tesla is lowering prices due to lower demand for its vehicles β€” a move Musk has touted to boost sales.

Earlier this month, Tesla reported modest quarter-over-quarter sales growth despite price reductions due to increased competition and a gloomy economic outlook.

The company delivered 422,875 vehicles in the first three months of this year, four percent more than in the previous quarter.

And that was 36 percent higher than a year ago.

Tesla is lowering the price of its Model Y, making it cheaper than the average American vehicle.  The starting cost is now $46,990, $759 less than the typical car or truck, and it's the sixth time Tesla has slashed EV prices this year

Tesla is lowering the price of its Model Y, making it cheaper than the average American vehicle. The starting cost is now $46,990, $759 less than the typical car or truck, and it’s the sixth time Tesla has slashed EV prices this year

The dramatic fall in shares also comes as major Tesla investors wrote an open letter to the board demanding that they keep the

The dramatic fall in shares also comes as major Tesla investors wrote an open letter to the board demanding that they keep the “overcommitted” Elon Musk on the short end of the stick

According to an average of estimates compiled by FactSet as of Friday, Wall Street expected Tesla to report deliveries of about 432,000 vehicles for the quarter, the Wall Street Journal and CNBC reported.

Tesla shipped six percent more of its mainstays Model 3 and Model Y in the first three months of this year than in the previous quarter.

But deliveries for the more expensive Model X and Model S vehicles fell 38 percent.

READ MORE: Tesla buyers storm showrooms across China after the company announces surprise price cuts

1682528122 479 Tesla market value plummets 143 BILLION in just 26 days

Footage shows mobs of angry car owners storming Tesla distribution centers in several Chinese cities, including Shanghai, Beijing, Shenzhen, Chengdu and Xi’an, demanding a refund.

The downgrade of Tesla’s Model Y and other models this year has not gone down well with investors.

Jefferies lowered Tesla shares to Hold from Buy on Wednesday after the EV maker warned on last week’s earnings call that it likely continues to lower prices to boost demand for its products. To invest. com reports.

Jefferies also lowered its 2023 estimates and now expects Tesla to ship 1.79 million units with an average retail price of $46,000.

Tesla bull Gary Black of The Future Fund LLC recently told CNBC’s Last call“I just think the whole price cuts they’re doing don’t make a lot of sense… Every time they cut prices on Model Y by $1,000, it costs them $500 million.”

“And really, what they need to do to continue to drive EV adoption is teach people why an EV is better.”

The open letter shared by investors this month said they believe Tesla, as it is currently run, “endangers its long-term value,” takes “substantial legal, operational and reputational risks,” and is concerned about the Musk’s involvement.

Tesla appears to be embracing a broader culture of “above the law,” they wrote, according to CNBC, citing several lawsuits accusing them of racial discrimination, sexual harassment, unsafe working conditions and union breaking.

“Instead of working to address issues with regulators, CEO Musk has been making derogatory tweets and comments, fueling tensions,” they added, referring to Musk as “overcrowded” between multiple companies.

Kristin Hull, one of the shareholders who signed the letter, said: “We want the board to take their job seriously – we don’t see them doing well as Elon Musk’s boss.”