1 Unfavorable Trend Explains the 21% Plunge in Tesla Stock in 2024

Tesla (NASDAQ: TSLA) was the world's largest electric vehicle (EV) company by sales until the fourth quarter of last year when China-based BYD outsold it for the first time. Tesla once had the EV market almost entirely to itself, but now, it's grappling with a tsunami of competition from EV start-ups and legacy automakers entering the space.

At the same time, demand from consumers appears to be fading. EVs typically come with a premium price tag, and high interest rates are forcing more consumers to opt for cheaper gas-powered vehicles. Tesla slashed prices by an average of 25% in 2023 to help spur demand, which dented the company's profitability.

Tesla stock is down 21% year to date, and most of that decline happened after it reported its official results for full-year 2023. Tesla delivered a record 1.8 million vehicles for the year, but it was an increase of just 38% year over year, which marked the slowest pace of growth since 2020.

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Source Fool.com