As of Monday’s close, Tesla’s stock price fell by 6%. Previously, some investors were concerned that the first-quarter delivery report released by Tesla indicated that the company needs to further reduce prices to boost sales, thereby eroding profit margins.
After a 20% price reduction in January, Tesla delivered a record-breaking 422,875 vehicles in the first quarter, but only 4% higher than the previous quarter. Several analysts have expressed doubt about these numbers. Concerns have been raised that, in order to achieve CEO Elon Musk’s goal of delivering 2 million vehicles by 2023, Tesla may need to further reduce prices this year.
According to the report released by Bernstein analyst Toni Sacconaghi, “Many investors believe that Tesla’s recent price cuts reflect its structural cost advantages, which can put pressure on competitors, achieve huge sales, and dominate the electric vehicle market. We insist that the price cuts have damaged the profitability of the industry (including Tesla), but existing companies are financially strong and unlikely to give in.”
As of Monday’s close, Tesla’s stock price fell by $12.69 to close at $194.77, down 6.12%, with a market value loss of $40.1 billion, leaving only $616.3 billion.
