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Musk said growth would be "notably lower" as Tesla focuses on a
cheaper, next-generation electric vehicle to be made at its
Texas factory in the second half of 2025, which is expected to
spark the next boom in deliveries.
But his remarks fell flat with investors, with Tesla set to lose
more than $50 billion in market value, if premarket loss hold.
Its stock was already down 16.4% this month, as of last close.
"The Tesla headlines have essentially gone from bad to worse,"
said TD Cowen analysts, noting that the fourth-quarter revenue
and profit were also below expectations.
Shares of other EV makers also fell, with Rivian Automotive Inc,
Lucid Group and Fisker down between 1.2% and 2.4%.
The EV industry has been grappling with a slowdown in demand for
more than a year and the price cuts by Tesla will likely worsen
the pressure on the startups and automakers such as Ford.
"The problem for Tesla is any significant attempt to boost sales
from here on will probably need to be achieved at the cost of
further falls in operating margin, due to having to compete with
BYD in China, as well as increased competition elsewhere," said
Michael Hewson, chief market analyst at CMC Markets.
At least, nine brokerages downgraded the stock, while seven
raised their ratings. The company, on average, has a "hold"
rating with a median price target of $225, nearly 9% higher than
the share's last closing price.
Tesla short sellers have made $3.45 billion so far this year,
making it the most profitable U.S. short trade, according to
data and analytics firm Ortex.
The company's stock trades at nearly 60 times its 12-month
forward earnings estimates, according to LSEG data. That gives
it a more premium valuation than the other "Magnificent Seven"
stocks – a group that includes Apple, Microsoft and Nvidia.
Some analysts said valuation could become tough to justify if
Tesla's sales growth and margin weaken further.
"Tesla is increasingly looking like a traditional auto company,"
said Bernstein analyst Toni Sacconaghi.
(Reporting by Aditya Soni in Bengaluru; Additional reporting by
Medha Singh; Editing by Arun Koyyur)
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