Tesla's Star Fades as Market Capitalization Plummets $580 Billion

Strategic Insights -

Tesla, the electric-vehicle maker, has seen its market capitalization drop by $580 billion this year, making it the world's seventh largest company, behind Berkshire Hathaway. The company's stock has plunged 52% this year, and its CEO, Elon Musk, has been preoccupied with his acquisition of Twitter. Despite its solid fundamentals, including a 55% increase in adjusted earnings and a 56% jump in revenue, Tesla's stock price has continued to decline.

Key Takeaways:

  • Tesla's market capitalization has dropped by $580 billion this year, making it the world's seventh largest company.
  • The company's stock has plunged 52% this year, compared to a 32% decline for General Motors and a 31% decline for Ford.
  • Tesla's adjusted earnings before interest, taxes, depreciation, and amortization increased by 55% year-over-year to almost $5 billion, while revenue jumped 56% to $21.5 billion.
  • The company delivered 907,573 vehicles in the first nine months of 2022, up 45% year-over-year, and produced 927,910 cars, up nearly 49%.
  • Tesla's CEO, Elon Musk, has been preoccupied with his acquisition of Twitter, which has raised concerns among investors about the company's future profitability.
  • Musk has admitted to working 120 hours a week to manage Twitter, SpaceX, and Tesla, and has stated that once Twitter is set on the right path, it will be easier to manage.
  • Tesla has a clear roadmap for the future, including the delivery of its first Semi truck to PepsiCo in December and the production of its highly anticipated Cybertruck in mid-2023.

Statistics:

  • $580 billion: The decline in Tesla's market capitalization this year.
  • 52%: The decline in Tesla's stock price this year.
  • 45%: The increase in vehicles delivered by Tesla in the first nine months of 2022.
  • 49%: The increase in vehicles produced by Tesla in the first nine months of 2022.
  • $5 billion: The increase in Tesla's adjusted earnings before interest, taxes, depreciation, and amortization year-over-year.
  • $21.5 billion: The increase in Tesla's revenue year-over-year.

Sources:

  • John Koetsier, "Tesla Model Y Gets Highest Safety Score Ever in European Test," Forbes, September 7, 2022.
  • Experian, "Tesla dominates US electric vehicle market in 2022," data from Experian.
  • Gary Black, "Since Elon completed his purchase of TWTR on 10/28, $TSLA continues to underperform (TSLA -20% vs [Nasdaq 100 Index] +3%) due to investors' concern that TWTR's loss in ad [revenues] will require more capital from @elonmusk and continued uncertainty about China sales and pricing," Twitter, November 14, 2022.
  • Bloomberg, "Tesla's Stock Drops as Musk Focuses on Twitter," November 14, 2022.