Tesla slid further into the stock market this week after the news that Elon Musk will complete the Twitter purchase agreement. The Twitter effect on Tesla stock is explained in the first place because Musk is quite a busy person and the fact that he devotes time to social media once purchased will likely result in a reduced time spent on Tesla, which is not quite what you want from a CEO of a major company. The other main reason is that Musk has had to sell about $ 20 billion worth of Tesla stock in the past year, most of it to secure the Twitter acquisition.
In a few weeks the stock has thus lost over 21% and the balance since the beginning of the year is back decidedly meager (-31%).
The view on the Tesla stock of BG Saxo
Tesla has been one of the best stocks since May, but the ups and downs of the past few days highlight investor nervousness. Like this Simone Di Biase, Head of Relationship Management di BG SAXO according to which on the one hand there are third quarter sales that did not meet the estimates, on the other hand the high lithium prices that impact on production costs, and finally the cost of living crisis which translates into a significant drop in demand by many categories of consumers, including car buyers. Tesla is facing all this even if analysts’ expectations remain very rosy: they forecast, however, a 42% growth in revenues in 2023.
Tesla shares lost 8.6% in one session and much of this Tesla debacle was caused by the spread of data on deliveries for the third quarterdown compared to estimates (343,830 against 357,938) due – according to official sources – to logistical problems.
But it’s not just a matter of logistical problems in the global automobile supply chain. There are two other sources of risk. So far, Tesla has been immune from the cost of living crisis caused by the runaway energy crisis. However, cWith high electricity prices and high inflation, demand is dropping dramatically for many successful consumer companies like Apple, Nike and H&M. This is arguably the biggest risk to Tesla’s outlook as well, which until now are still very optimistic with analysts expecting 42% revenue growth in 2023. A rosy vision that’s hard to go along with, the analyst says. considering the evolution of electricity prices and disposable income.
Furthermore, there are two further major obstacles to Tesla’s growth. The first is the lithium price which remains high and leads to an increase in the cost of batteries and therefore that of electric vehicles. This means that, also given the expected adoption curve for electric vehicles, we are facing a market that could remain contracted for years.
Another constraint is represented by the physical power grid which needs a massive upgrade to handle all new electric cars and air-to-water heat pumps. Both of these issues are beyond Tesla’s direct control and, if not resolved quickly, could turn the 50% annual growth target into a vision with no connection to reality.