BUSINESS
Is Tesla headed to dire straits? Analyst warns of ‘darker days’
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Tesla, the electric carmaker led by billionaire Elon Musk, is facing a critical moment currently, according to an analyst. The company’s first quarter was a disaster at the share market as its stock sank, according to Business Insider.
The electric carmaker’s deliveries fell far short of expectations of Wall Street analysts, as the company delivered about 386,800 cars in Q1. The drop in deliveries of **cars** stands dropped 20% from the previous quarter and more than 8% from the same time last year.
Hence, Tesla has suffered a year-over-year drop in quarterly deliveries for the first time since 2020. Tesla shares fell more than 5% after the news and nearly 30% over the past year.
Analyst Dan Ives called it an “unmitigated disaster” and a “seminal moment” for Tesla. He believes that CEO Elon Musk needs to turn things around quickly to avoid “darker days” for the company.
“Let’s call this as it is: While we were anticipating a bad 1Q, this was an unmitigated disaster 1Q that is hard to explain away,” Wedbush Securities’ analyst Dan Ives said.
“We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative.”
Tesla blamed production issues, a factory fire at its Berlin Gigafactory, and supply chain problems caused by the Red Sea conflict. However, some analysts pointed to softening demand and competition, particularly in China.
Despite these challenges, Ives remains optimistic about Tesla’s long-term prospects. He said, “You have to weigh out the strategy.”
“What are price cuts going to look like, when are the new models coming, what could software be as a percent of revenue, what’s the AI roadmap? Right now, it’s essentially playing darts blindfolded,” he noted.
Elon Musk-led electric car maker is also facing competition in the Chinese market from BYD. The company has tried to boost sales with price cuts and pushing its Full Self-Driving software. But Musk’s recent behaviour may be responsible with fewer Americans considering a Tesla purchase.
Source thenews.com.pk
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