Tesla shares plummeted more than 15% last week after CEO Elon Musk sounded the alarm on macroeconomic concerns during the company’s third-quarter earnings call. For the period ending Sept. 30, 2023, Tesla reported revenue of $23.35 billion and profits of $1.85 billion, down from the prior quarter and the same period last year.
Musk attributed the decline to several factors, including rising interest rates, inflation, and the ongoing war in Ukraine. He warned that these headwinds will likely persist in the coming months, putting pressure on Tesla’s margins. In addition to the macroeconomic challenges, Musk acknowledged that Tesla is facing increased competition from Chinese EV makers. He said the company is working to reduce costs to remain competitive.
Musk’s comments sent shockwaves through the market, with Tesla shares closing the week at $211.99. The decline marked the worst week for Tesla stock of the year. Despite the recent sell-off, Tesla shares are still up 96% year-to-date. However, analysts are warning that the company’s growth may be slowing. Some analysts even question whether Tesla is still a “growth” stock. They point to the company’s declining margins and the increasing competition from Chinese EV makers.
Only time will tell whether Tesla can weather the current economic storm. However, the company faces several challenges that could impact its future growth.
