It has not been a great market for electric vehicle (EV) stocks of late. All anyone needs to do is look at Tesla (NASDAQ: TSLA) and its latest performance. Granted, Tesla’s slide isn’t all EV market-related, but as one of the leaders in the field, it’s clearly also leading the market’s march into what may be its collective grave.
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Tesla posted another nearly double-digit loss in Thursday’s trading session. A slight bump up in after-hours trading gave it a little extra help, but not nearly enough to scrub the panoply of losses incurred over the last few weeks. With Tesla announcing end-of-year discounts and sales events, that’s got some thinking very dark thoughts about the company. For instance, the notion that Tesla seems more interested in meeting Wall Street-set delivery goals than profit metrics for shareholders.
Tesla’s fate is hardly unique, however. Investors are pulling back on the entire EV space, taking a much sharper interest in profitability over environmental awareness. In fact, Morgan Stanley suggests that most of the 2023 fiscal year will feature discounts not just from Tesla but from the litany of other EV market players as well.
It looks for inflationary pressures and supply chain problems to relax somewhat, but the rest of those price cuts’ funding will have to come from somewhere, and that’s likely to be in EV margins. A range of EV players were already down in Thursday’s trading, from REE Automotive (NASDAQ:REE) to ChargePoint Holdings (NYSE:CHPT).
Overall, Wall Street analysts have a consensus price target of $275.19 on TSLA stock, implying 119.54% upside potential, as indicated by the graphic above.
