Tesla has warned of a slowdown, which it believes is a reflection of falling demand for electric vehicles around the world.
Tesla shares fell more than 12% on Thursday after the company announced that its sales growth this year will be slower than in 2023. bbc reported.
This has reduced Tesla's stock market value by almost $80 billion.
Despite the lower prices, Elon Musk, chief executive officer (CEO) of Tesla Motors, stated that its sales growth “may be noticeably lower” in 2024.
The auto company's quarterly results, released Wednesday, also missed Wall Street projections.
The corporation has been lowering prices in major global areas, such as China and Europe, to remain competitive in the face of fierce competition from Chinese automakers and rivals such as Build Your Dream (BYD).
The continued high cost of borrowing (a result of central banks around the world maintaining high interest rates to combat inflation) has also reduced demand.
According to Tesla, price reductions, increased research and development expenses, and expenses related to increased production of the new Cybertruck have reduced its profit margin.
Additionally, the company said it was “between two major waves of growth” and would begin producing a new, less expensive car in the second half of the following year.
Additionally, Musk warned investors that if trade restrictions are not implemented, Chinese rivals will “virtually demolish most other car companies in the world.”
In the final three months of 2023, BYD overtook Tesla to become the world's best-selling electric vehicle maker, prompting it to advocate for trade restrictions in a fiercely competitive sector.
After years of rapid expansion, Tesla has warned of a slowdown, which it believes is a reflection of declining demand for electric vehicles around the world.
Right now, Tesla's stock value has fallen more than 25% this year.
