Tesla is the most successful company in the electric vehicle sector.
What happens to them has ripple effects on the entire industry.
And Elon Musk was hit with some bad news that raised this question about electric vehicles.
Tesla is the darling of the electric vehicle industry.
The company is the only financially successful standalone electric vehicle maker and has become one of the hottest stocks on Wall Street over the last five years.
Now the slump that’s hammering the electric vehicle industry has come to Tesla.
Tesla fails as deliveries fall for the first time since 2020
Tesla is now the second worst-performing stock on the S&P 500 Index this year after the company failed to meet delivery expectations for the first time since 2020.
“Tesla reported its first year-over-year decline in quarterly deliveries since 2020, badly missing Wall Street’s expectations and stoking further concern about the company’s growth prospects this year. Elon Musk’s electric vehicle maker delivered 386,810 vehicles globally in the first three months of 2024, down 8.5% from a year earlier. It was the company’s lowest quarterly performance since the third quarter of 2022,” the Wall Street Journal reported.
Now the alarm bells are ringing on Wall Street for Tesla after the company’s big miss.
Wedbush Securities analyst Dan Ives called the news an “unmitigated disaster that is hard to explain away” and described the first quarter performance as a “train wreck into a brick wall.”
“This is a fork in the road time to get Tesla through this turbulent period, otherwise troubling days could be ahead,” Ives added.
Electric vehicle industry struggling despite record government support
The broad electric vehicle market has been in a slump after production was ramped up by automakers to meet the ambitious goals set by President Joe Biden’s administration.
He added a $7,500 tax credit to boost sales and gave automakers generous government incentives to help increase production.
But weak consumer demand for electric vehicles is causing automakers to change their outlook and cut production.
Ford and General Motors announced that they were cutting production of electric vehicles and scaling back investments in them after suffering losses in the billions of dollars for their electric divisions.
Other automakers like Bentley, Mercedes-Benz, and Honda have revised their goals downward after poor sales.
Consumers don’t want to pay more money for a vehicle that’s saddled with problems.
Tesla’s struggles after becoming the industry darling raise the question of whether or not electric vehicles will ever be anything more than a small niche market for the wealthy.
Patriot Political will keep you up-to-date on any developments to this ongoing story.
