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Tesla's Stock Price Just Plunged. Is Now the Time to Invest? – Yahoo Finance

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After soaring through 2023, Tesla‘s (NASDAQ: TSLA) fortunes have suddenly changed in 2024.

The EV stock was the worst-performing stock on the S&P 500 in the first quarter, plagued by a disappointing earnings report, price cuts in the EV industry, and broader concerns about high interest rates weighing on demand.

The stock continued to slide in April as Tesla reported weak first-quarter deliveries, which were down 9% from the previous year, and it made the surprising move of laying off 10% of its workforce later in the month. The stock is down 11% in the past week, hovering near a 52-week low at a time when the S&P 500 is near an all-time high.

So is it a good idea to buy Tesla on the dip? Let’s take a look at where the company is today before we answer that question.

Image source: Tesla.

Tesla in transition

Ever since Tesla stock skyrocketed in 2020 when it became profitable, the stock has had a much higher valuation than its traditional automaker peers. Even after the recent sell-off, Tesla is valued at $500 billion, making it one of the most valuable stocks in the country, and several times more valuable than peers like General Motors and Ford.

However, Tesla is now facing challenges on multiple fronts. Vehicle deliveries were not only down in the first quarter, but also significantly short of its production, indicating weakening demand. While the company hasn’t yet reported first-quarter earnings, profits are likely to be down significantly as prices have fallen due to increasing competition in the EV industry.

Additionally, media reports said that the company is putting the development of its mass market-priced Model 2 on pause so it can it focus on its robotaxi and full self-driving technology.

Tesla is also laying off more than 10% of its workforce, another indicator that demand is underwhelming, and two key executives involved with battery and vehicle manufacturing said they were leaving the company.

Down 37% this year, is Tesla a buy?

With EV sales struggling amid increasing competition, weakening demand, and high interest rates, Tesla is pivoting its hopes to its robotaxi and full self-driving technology.

CEO Elon Musk said the company would unveil its robotaxi on August 8, but the company is also notorious for delaying its promises and product releases, and Musk has a pattern of using such promises when it’s struggling.

Tesla’s robotaxi has the potential to be a game-changer for the company, but even if Tesla does launch the robotaxi in August, regulation is likely to make a full roll-out challenging.

Autonomous vehicles were predicted to go mainstream several years ago, but that didn’t happen due to regulatory pressure, safety concerns, and media scrutiny, among other issues.

However, Tesla isn’t the only company working on self-driving technology. Alphabet‘s Waymo has racked up millions of miles of driverless transportation and is now actively ferrying passengers in San Francisco, Los Angeles, and Phoenix. General Motors‘ Cruise was also active in San Francisco until regulators recently pulled it off the road after too many infractions. Other tech and auto companies have also made significant progress in autonomous driving as well.

Tesla is still priced at a premium even though the core growth story, selling EVs, appears to be on hold, at least as long as deliveries and prices both keep falling.

A recovery in the stock will take a return to solid growth in EV sales and profits or a blowout presentation of the robotaxi, as autonomy is already priced into the stock.

In the current economic environment and with the broader headwinds in the electric vehicle sector, that looks more likely to be a losing bet. Tesla stock is best avoided at this point.

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Tesla’s Stock Price Just Plunged. Is Now the Time to Invest? was originally published by The Motley Fool

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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