The Elon Musk-led company Tesla’s stock fell 11% to settle at $109.10, marking the seventh straight day of declines and the biggest decrease since April. The market value of the manufacturer of electric vehicles has decreased to about $345 billion, which is less than Walmart Inc., JPMorgan Chase & Co., and Nvidia Corp.
Since October began, the value of the company’s stock has decreased by more than half. Tesla lost its ranking as one of the top 10 most valuable firms in the S&P 500 Index, a position it had maintained since establishing the benchmark in December 2020, as a result of this most recent selloff.
Investors are concerned that now that Musk is the CEO and owner of the social network Twitter, it is consuming a lot of his time.
As he introduces a variety of new ideas and frequently reverses them, his time as the platform’s leader has been characterized by instability. After the majority of Twitter users polled and chose for him to stand down, Musk recently declared that he will hire a new CEO to succeed him.
The worst month, quarter, and year on record are about to come to an end for Tesla, which has surpassed Meta to rank as the lowest performing stock among the most valued tech companies in 2022. The most recent decline follows news from The Wall Street Journal that Tesla will extend a week-long production shutdown at its Shanghai site due to an increase in Covid cases among its Chinese staff.
Worries that demand is waning have increased with news of reduced manufacturing in Shanghai, which follows last week’s story that Tesla was giving US customers a $7,500 bargain to accept delivery of its top two models before the end of the year. These concerns represent a huge risk for Tesla, whose worth is dependent on its potential for future development.
The manufacturer of electric vehicles is dealing with production issues brought on by pandemics, increased competition, and concerns about the economy.
Additionally, a number of experts and influential investors have harshly criticized Musk for what they consider to be a lack of attention on Tesla, arguing that the company requires leadership as it copes with a challenging business environment.
Tesla to run reduced output in Shanghai in January
In accordance with an internal notification and two individuals with insight into the situation, Tesla opted to cease most of the operations at the facility on Saturday rather than waiting until the final week of December as originally planned.
Additionally, it intended to halt Model Y production at the facility from December 25 until January 1.
The suspension follows China’s easing of its zero-COVID policy just this month, a sudden change that was well-received by enterprises and the general public but severely disrupted corporate operations in the immediate term.
Based on an internal schedule, Tesla intends to continue the lower production it started this month into the coming year by running a lower manufacturing routine at its Shanghai facility in January.
The company will operate manufacturing for 17 days in January from Jan. 3 to Jan. 19 before ceasing production of electric vehicles for a long hiatus for Chinese New Year from Jan. 20 to Jan. 31.
