Tesla Tumbles further, Will Anything Stop its Fall?

Oh boy, where do we begin?

Where did Tesla go wrong? The once red-hot electric automaker was considered to be a part of the Magnificent Seven, a collection of behemoth tech stocks with some pretty recognizable names. Now? Tesla is considered to be one of the worst-performing stocks of the entire S&P 500 during a time where we are seeing some of the highest highs in the market. 

Well, fasten your seatbelts because here we go:

1. Tesla is plagued with serious safety issues, and recalls have caused the electric giant to slash its car prices even more than it already has. 

2. The electric vehicle industry as a whole is becoming more crowded than ever before at the absolute worst time for the company, just as its fundamentals are coming into question. To date the company's share price has dropped more than 60% from its 2021 all-time high of $407.

3. This cramped competition can be realized even further with the fact that China’s electric vehicle champion, BYD, has overtaken Tesla as the largest EV producer in the world, with a 22% increase in global sales for Q4 of last year, surpassing Tesla by over 41,000 units. This is bad news for Tesla as it begins to lose its foothold over the Asian region even further as its gap over the Chinese rival decreased from 400,000 units posted in 2022 to 230,000 units posted in 2023.

4. After missing expectations on the company's reported earnings earlier this year, it has become apparent that demand for electric vehicles has declined and is notably lower than last year. The company seems to be stuck between two major growth phases as it works on launching its next-generation vehicles. We can only hope that those new cars don’t have any major issues as the current generation of vehicles does; otherwise, Tesla could spiral into an even deeper rabbit hole than it currently is.

A new report by Wells Fargo analyst Colin Langan gives analysts an even darker picture than previously imagined, stating that the company is a “growth company with no growth.” We can only keep watching to see what happens from here on out for Tesla.