Updated at 9:43 amEDT
Tesla shares fell in early trading Wednesday and remain deep in the red for the year, as investors searched for new data suggesting the electric car maker's challenges extend far beyond its current difficulties in China.
tesla (TSLA) Shares have fallen nearly 25% this year, giving up more than $195 billion in market value, as investors cut sales and profit forecasts amid falling demand for electric vehicles, intensifying competition in China and a global price war that is eating away at the group's profit margins.
CEO Elon Musk's back-and-forth decision-making, which has included mass layoffs, immediate rehirings and veiled threats to pursue his ai-focused ambitions beyond Tesla's corporate structure, have also weighed heavily on consumer sentiment. investors.
However, new data released by Bloomberg on Wednesday may have added another item to investors' growing list of concerns.
Fall in European sales
Citing data from the European Automobile Manufacturers Association, Bloomberg noted that Tesla car registrations in Europe fell to 13,951 in April, a 2.3% decline from a year earlier and the lowest in 15 months.
More broadly, however, overall EV registrations rose 14% in April, suggesting that Tesla-specific issues, rather than industry demand, are holding back sales.
Tesla has closed its Berlin Gigafactory on at least two separate occasions this year, due in part to supply chain disruptions in the Red Sea and the impact of environmental protesters.
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Weakening sales in Europe also follows a disappointing start to the year in China, Tesla's most important market.
Data from the China Passenger Vehicle Association earlier this month indicated that Tesla's April sales in China fell 18% from a year earlier to 62,167 units, down 30% from March.
Sales of its main rival, BYD, backed by Warren Buffett, (WILLPOWER) increased almost 50% to 312,048 units.
The overall decline in sales has forced Tesla to launch the largest wave of layoffs in the company's history. Musk said the cuts would likely eliminate about 10% of the group's 140,000 global workers.
Reuters has reported, however, that Musk wants that total to increase to 20%. The company recently delivered so-called WARNING notices to hundreds of employees at Tesla facilities in California.
Morgan Stanley remains optimistic
All that said, Morgan Stanley's Adam Jonas, a veteran Tesla bull and one of the company's strongest defenders on Wall Street, reiterated his overweight rating on Tesla stock this week, arguing that “Elon needs Tesla more.” never”.
Jonas said Musk's ai ambitions, tied to the large number of companies he runs, will increasingly rely on lower-cost capital, which can only come from successful Tesla performance.
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“In addition to the cost of capital, we believe at a fundamental level that the data, the infrastructure built, and the path to monetization within Tesla are critical to Musk's seemingly 'adjacent' ai efforts,” Jonas wrote.
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However, not all shareholders agree with that assessment, at least not at the level of compensation Musk is currently seeking.
New York City Comptroller Brad Lander, along with a pair of institutional investors, published an open letter on May 21 arguing that Musk's $55.8 billion pay package, which the company agreed to in 2018, is not the best for the company.
Shareholders will vote on the deal next month in an effort to support an appeal of Delaware Court of Chancery Judge Kathaleen McCormick's rejection last year.
“Shareholders should not pretend that this award has any kind of incentive effect; it does not,” the letter said. “What it does have is a problem of excess, which has been evident from the beginning.”
Musk has said he needs both the deal and control of 25% of Tesla shares to be able to effectively lead the group. He says he will pursue his ai and robotics ambitions outside of the Tesla structure if he is not able to meet that threshold.
Tesla shares fell 2.8% in early trading Wednesday to change hands at $181.40 each. And while the stock is up 27% over the past month, it's still down 27% year to date.
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