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Although Tesla has regained the top spot in electric vehicle sales in the first quarter after a loss to China’s BYD, the company is struggling.
Increasing competition in the electric vehicle market and falling demand in China due to economic tensions are causing a decline in sales for Musk’s creation.
Tesla’s sales figures from January to March 2024: 386,810 EVs sold and 433,371 cars produced, down 8.5% and 1.7%, respectively, compared to the same period last year.
And let’s not forget that, in February 2024, Tesla had to recall the largest batch in its history: 2.2 million electric vehicles, all because of a tiny font on the dashboard.
No wonder the value of the company’s stock continued to fall. In the last three months, Tesla’s stock has fallen more than 30%, and it doesn’t look like it has bottomed out yet.
What’s the surprise? After a disappointing quarter, Reuters has released news that the long-awaited Model 2 has been scrapped. Musk vehemently denies it.
But wait, there’s more. Another setback could be the delay in the launch date of Tesla’s robotaxis. Elon Musk just announced that Tesla will introduce them on August 8.
What’s in store for us?
According to BBG, Tesla shares are on the verge of breaking a critical support level. A downward break could trigger an even deeper correction. So it’s time to tread carefully.
Per Lekander, a hedge fund manager and longtime Tesla skeptic, states that stock could be the mother of all bubbles in U.S. market history, with a potential plunge of up to 90%.
Ultimately, the market’s response depends on the overall situation. If the risk-averse trend persists with added pressure, Tesla shares could plummet.
Therefore, it is crucial to keep an eye on support and resistance levels. And, of course, do not forget about stop losses, lest we encounter serious losses.
