Tesla Set To Lose $70B In Valuation

While price cuts have damaged profitability and prompted investor fears at the world’s most valuable manufacturer, Tesla (TSLA.O), CEO Elon Musk cautioned that sales growth will stall this year, sending the stock down almost 11% on Thursday.

Musk predicted a “notably lower” growth rate as the company prepares to produce a more affordable next-generation electric vehicle at its Texas plant in the second half of 2025. This model is anticipated to trigger the subsequent surge in deliveries.

However, investors were unconvinced, and Tesla will lose almost $70 billion in market value if current trends continue. Its monthly loss in market value would then reach nearly $200 billion.

Rivian Automotive Inc. (RIVN.O), Lucid Group (LCID.O), and Fisker (FSR.N) were among the other electric vehicle manufacturers whose shares plummeted as well, down 4.7% to 8.8%, respectively.

The electric vehicle sector has been struggling with declining demand for over a year. With Tesla’s price decreases, the pressure on startups and established manufacturers like Ford (F.N.) will likely only increase.

Nine brokerages have lowered the stock, and seven have upgraded it. The company’s consensus price objective is $225, around 9% more than the share’s most recent closing price, and an average “hold” recommendation.

Ortex, a data and analytics organization, reports that short sellers in Tesla have profited $3.45 billion this year, making it the most lucrative short transaction in the United States.

According to LSEG statistics, the firm’s stock is trading at a price approximately sixty times its 12-month forward earnings expectations. A higher value than the other “Magnificent Seven” stocks—which include Nvidia, Apple, and Microsoft—is a result of this.

If Tesla’s sales growth and margin continue to decline, several experts have argued that the value may become challenging to explain.

A famous Indian industrial conglomerate, the Adani Group, is still in a downward spiral after a short seller accused it of engaging in stock manipulation and fraud, calling it “the largest con in corporate history.”

The market value of Adani’s listed firms has been slashed by almost $70 billion due to the criticism, which has significantly reduced the net wealth of Gautam Adani, the group’s founder. Furthermore, it has raised doubts regarding the conglomerate’s capital-raising initiatives, such as its massive stock offering.