Monday, May 16, 2022

Why Is the Tesla Stock Market Falling Down?

Why Is the Tesla Stock Market Falling Down?
Why Is the Tesla Stock Market Falling Down?

Why is the Tesla Stock market falling? Well, Tesla stock has been on a rollercoaster ride with the tesla stock market value fluctuating more than any other car company. Tesla’s CEO Elon Musk was recently quoted saying “I really feel confident about Tesla’s future.” Investors are wondering if this is just another Elon Musk hype or an actual signal of good things to come. Let’s take a closer look at what is going wrong and how it could be fixed.

Electric vehicles will soon change urban transportation and will play a key role in the future of greenhouse gas emissions and maintain an eco-friendly atmosphere. As per the International Energy Agency reports, by 2030 there will be 230 million vehicles on the road. As of last year, the count was 10 million.

But will Tesla have the same hype after 10 years for electric cars? Based on the valuation of the company and the progress of its competitors, Tesla lacks real-time earnings and a long-term strategy for revenue generation. Its poor corporate governance is baffling investors.

Why is the Tesla stock market value always volatile?

Well, Tesla and Tesla’s stocks sure come with their drawbacks.

  1. There is a supply/demand imbalance in Tesla, the supply of the stock is more than the demand of the stock, which increased the stock price to 800+ dollars per stock.
  2. Honestly Tesla didn’t just make money by selling cars. The 100% profits that Tesla made are from the sale of regulatory credits to other auto manufactures which will soon expire. From a business perspective, the earnings of Tesla are very poor.
  3. Tesla is majorly focusing on its geometrical expansion, but infrastructure alone is not enough for a successful business. It lacks in long-term strategy which plays a key role to generate revenue.

How long will the Tesla hype last?

Tesla’s market value flew over $800 billion in one year as of January 2021 but soon fell to $600 billion by February 2021. As of today, it is valued at around $679 billion. Investing needs a lot of research and knowledge and of course money. Based on Tesla’s current stand-in market its stock price is ridiculously high, and it’s not worth buying it at this point.

We all know that Tesla’s stock price is volatile. It swings back and forth based on the day, but it has been severely declining since October. Is this because of a decrease in demand? The company could be struggling to meet production quotas. Whatever the reason might be, I’m sure Elon Musk will figure out how to get things moving again!

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