Tesla's stock has dropped nearly 8% as the company faces global competition from cheaper Chinese alternatives and reduced demand due to policy changes in the U.S. and Europe. The company's revenue fell by 12% in the second quarter, marking its largest setback in a decade.
Tesla Stock Plummets Amidst Global Challenges and Policy Shifts
Tesla Stock Continues to Plummet
Tesla's stock fell nearly 8% at the opening of the New York Stock Exchange. This decline follows an 18% decrease in Tesla's market value so far this year.
"We might face a couple of tough quarters," said the controversial major shareholder and CEO Elon Musk during the presentation of a quarterly report on Wednesday.
About 20 minutes after the market opened in New York, Tesla's stock had fallen by 7.7%.
Tesla is globally challenged by cheaper Chinese alternatives and an increased demand for hybrid cars in many countries. The company is also set to be affected by the removal of tax subsidies for electric car purchases in the U.S., which could impact demand there.
Meanwhile, sales are plummeting in Europe, with the exception of the electric car haven Norway. Recent June figures from the industry organization ACEA show that Tesla's new registrations in the EU dropped by 39.5% to 20,349 cars in June.
In the second-quarter report, Tesla's revenue fell by 12% to $22.5 billion – the largest setback in at least ten years. Both the sales volume and the average price of the company's cars fell.
This year has also been marked by the volatile relationship between Elon Musk and U.S. President Donald Trump – from Musk leading Trump's special unit for public cuts at the White House to a brutal war of words on social media that escalated when Trump's budget with reduced electric car subsidies was passed in Congress.