Panasonic acknowledges battery production reduction, and Tesla's stock price fell nearly 5% on Monday

On October 31st, Tesla's stock price fell nearly 5% on Monday, US time. Previously, Tesla's long-term partner and battery supplier Panasonic acknowledged in financial reports that in the third quarter ending September 2023, Panasonic's battery production in Japan decreased

On October 31st, Tesla's stock price fell nearly 5% on Monday, US time. Previously, Tesla's long-term partner and battery supplier Panasonic acknowledged in financial reports that in the third quarter ending September 2023, Panasonic's battery production in Japan decreased.

These news have raised concerns among investors about weak demand for electric vehicles, especially those with higher prices that may not be eligible for US government tax breaks or other incentives. Panasonic's batteries are used in Tesla's earlier and more expensive Model XSUV and Model S sedans.

On October 18th, during Tesla's third quarter financial report conference call, CEO Elon Musk reminded shareholders that high interest rates have put enormous pressure on the company, forcing electric vehicles to maintain low prices and potentially hindering consumers' ability to purchase or rent electric vehicles.

Musk also said many times that Tesla is facing more serious challenges with the launch of the highly anticipated CyberTruck, an electric pickup truck. Not long ago, he exclaimed, "CyberTruck is our own grave

Musk also said during a conference call, "I just want to lower people's expectations for CyberTruck. This is a great product, but from a financial perspective, it will take 12 to 18 months to become a significant cash flow contributor

Since the conference call, Tesla's stock price has fallen by over 18%. According to data from Ortex, a financial information services company headquartered in London, Tesla's short positions earned $3 billion from that day until the close of last Friday. As of October 27th, Tesla's short position value was approximately $18.08 billion, accounting for 3.21% of freely traded stocks.

Tony Sacconaghi, an analyst at the US investment bank Bernstein, wrote in a research report to clients on Monday that the company expects Tesla's "profit margin to decline and sales to be disappointing" for the 2024 fiscal year. Bernstein expects Tesla's target stock price for the next 12 months to be $150.

Although Wall Street expects Tesla's car deliveries to reach 2.3 million units next year, an increase of approximately 500000 units year-on-year, But Sarkozy wrote, "In order to increase the delivery volume of 500000 vehicles, Tesla has had to reduce prices by about 16%, which will reduce the overall operating profit margin by 750 basis points. It is currently unclear whether Tesla will further reduce prices to drive sufficient demand growth without causing negative free cash flow. We believe that Tesla's delivery volume next year may be lower than market expectations and face lower profit margins

Bernstein holds a pessimistic view on Tesla, with an expected delivery volume of 2.15 million vehicles next year, with a diluted earnings per share of $2.59. However, the market generally believes that the delivery volume is 2.3 million vehicles, with an earnings per share of $3.30.

This pessimistic sentiment is spreading across various sectors of the electric vehicle market. The stock price of ONSemiconductor, which supplies chips for electric vehicles, plummeted by 20% on Monday, as the company's fourth quarter performance guidance was disappointing.

As of Monday, Tesla's stock price has dropped by nearly 5% from last Friday's closing price of $207 to $197. In less than 5 hours of trading, Musk's 715 million shares and vested options lost $7 billion in value.

After the stock market closed on October 17th, Musk released disappointing third quarter financial results and poor fourth quarter guidance, exacerbating the decline in Tesla's stock price. Since then, Tesla's stock price has fallen by a cumulative 23%, its market value has evaporated by $189 billion, and Musk's personal wealth has also shrunk by $41 billion.