Tesla shares drop after company misses delivery target

DETROIT (AP) – Shares of Tesla, which fell short of targets after the company announced 2022 delivery figures, tumbled more than 12% in its first full day of trading on Tuesday.

Shares of the electric vehicle and solar panel maker closed at $108.10 and are down just under 70% since the start of last year. The stock has hit its lowest point since August 2020, with Tesla’s market cap falling to $341 billion, surpassing $1 trillion in April, according to FactSet.

Tesla said on Monday it sold 1.3 million vehicles last year, but that number falls short of CEO Elon Musk’s commitment to increase deliveries by 50% almost every year.

The 2022 figure surpassed the previous record with 936,000 vehicles delivered in 2021, but fell short of the 1.4 million needed to meet the company’s 50% growth target. Sales increased by 40% year on year, while production increased by 47% to 1.37 million.

The deficit came despite a massive year-end sales boost that included a rare $7,500 discount in the US on the company’s best-selling models, the Model Y and 3. Analysts said Tesla is also offering discounts in China, prompting some to question whether demand for the company’s vehicles is softening.

Austin, Texas-based Tesla Inc. has also had to deal with rising cases of the novel coronavirus, which has hampered production at its Shanghai factory in China.

Cowen and Co. Analyst Jeffrey Osborne had expected investors to focus on missing the delivery target, but saw only a modest negative reaction “after China’s production cuts and severe weakness in discounts over the past few weeks.”

Osborne wrote in a note to investors earlier Tuesday that investors will need to see growing demand and order trends again this year for the stock to see stability in profit margins despite lower prices and for the stock to gain further support.

Tesla announced on Monday that it will hold an investor day event on March 1 at its factory near Austin in a clear effort to support the stock price. Investors will be able to see Tesla’s production line, discuss expansion plans, and see the platform under which Tesla’s next-generation vehicles will be handled.

According to Forbes, the drop in Tesla stock cost Musk billions of dollars and put him at the top of the list of the richest person in the world.

Musk’s $44 billion Twitter purchase and selling Tesla shares to fund the acquisition also play a role in the stock’s decline. Musk sold another $2.58 billion worth of Tesla shares last month, and has sold nearly $23 billion of shares in the auto company since April, when he began building a position on Twitter.

Many investors worry that Musk as Twitter’s CEO is too distracted and doesn’t pay enough attention to the electric vehicle company. Musk said he will step down as Twitter CEO once he finds someone to lead the social media platform.

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