Yahoo Autos Tesla Stock Down 40 Percent Over Last Year, Wiping Away $312 Billion In Market Cap
Good morning! It’s Friday, April 19, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Tesla’s Stock Is In Freefall
It has been an absolutely dismal year for Tesla’s stock price and market cap. So far, the stock is down just about 40 percent, which comes out to a loss of $98.49 per share. Those numbers also represent over $312 billion in market cap being wiped completely away.
The stock is sitting at $148.90 and Tesla’s market cap is at $477.5 billion. It’s the lowest share price in just about 15 months, and now Deutsche Bank is raising the alarm following the Austin, Texas-based automaker’s increasing focus on some sort of Robotaxi. The brokerage firm downgraded the stock to “Hold” and cut its price target from $189 to just $123. From Reuters:
The brokerage’s commentary follows Reuters report earlier this month that Tesla decided to cancel its long-promised inexpensive car that investors hoped would drive growth, while continuing to develop Robotaxis on the same vehicle platform.
Tesla has been pushing for greater adoption of its full self-driving advanced driver assistance software ahead of unveiling Robotaxi in August.
The brokerage said cracking the code on full driverless autonomy represents a significant technological, regulatory and operational challenge.
“The delay of Model 2 efforts creates the risk of no new vehicle in Tesla’s consumer lineup for the foreseeable future, which would put downward pressure on its volume and pricing for many more years,” Deutsche Bank analyst Emmanuel Rosner said.
As profitability takes a hit from price cuts to boost demand for its electric vehicles, Tesla earlier this week laid off more than 10% of its global workforce even as it continues to try to revive Musk’s huge pay deal from 2018.
The company has asked its shareholders to reaffirm their approval of Musk’s $56 billion pay that was set in 2018, but was rejected by a Delaware judge in January.
I guess there is a bit of a silver lining to all of this. Tesla is still the most valuable automaker in the world by market cap, besting the likes of Toyota, Porsche, Mercedes-Benz and BYD. Overall, it’s the 16th most valuable company in the world, but I wouldn’t expect that standing to be true much longer.
Please note all of these numbers are as of 9:50 a.m. EST.
2nd Gear: Nissan Not Optimistic About This Year
Nissan is slashing its full-year earnings outlook because of slow business in China and sluggish sales overall. From Automotive News:
CEO Makoto Uchida, who just unveiled a new mid-term plan focused on shoring up profitability, said the slipping volume and “cost relief” for suppliers undermined Nissan’s business trajectory.
“Were we overoptimistic?” Uchida said during a snap news conference to explain the Japanese automaker’s latest sales downgrade. “Yes, it’s true we did not reach what we anticipated.”
In plotting Nissan’s new three-year midterm plan, which is called The Arc and was unveiled late last month, product planners realized some of the company’s sales goals were a bit too rosy.
So, that not only means sales are down from previous expectations. It also means Nissan is going to pay off suppliers who built their own business plans around forecasts for stronger volume. It’s an awfully nice thing for Nissan to do, I suppose, but damn, that’s going to cost a pretty penny.
“We charted sales plans for each model and found out some models have difficulty reaching sales expectations,” Uchida said of the company’s profit warning.
“Suppliers have been making investments based on the assumptions we gave, and the volume decline is our fault. So, to reduce this burden on suppliers, we are making an additional booking.”
Uchida cut Nissan’s global sales expectations to 3.44 million vehicles for the just-end fiscal year that ends on March 31, down from the automaker’s earlier target of 3.55 million vehicles.
The new goal represents a moderate 4.1 percent increase over the 3.31 million vehicles Nissan sold in the previous fiscal year that ended March 31, 2023.
The adjustment marks Nissan’s second sales downgrade of the fiscal year. Nissan had earlier expected worldwide sales would register 3.7 million vehicles, before trimming it to 3.55 million.
Nissan is also expecting a $3.43 billion operating profit for the fiscal year. That sure sounds healthy, but it’s actually down from an earlier forecast of about $4.01 billion. However, it’s still a 40.5 percent jump over the past fiscal year. It’s so hard to make the shareholders happy, man.
