Tesla shares have suffered a massive drop in recent months, with noted Tesla analyst Dan Ives of Wedbush Securities stating this week that CEO Elon Musk is viewed as “asleep at the wheel” from a leadership perspective.
The Street reports that on Tuesday, Tesla’s shares reached their lowest point in over two years, continuing a downward trend in the company’s worst annual performance to date. This follows news that Tesla has temporarily stopped production at its Shanghai plant due to declining demand in the world’s largest automotive market.
According to Reuters, production at Tesla’s Shanghai plant has been suspended during the final week of the year, affecting the production of the Model Y sedan. This temporary shutdown is expected to result in a reduction of sedan production by approximately 30% compared to November.
This marks the first time that Tesla has intentionally reduced production levels at its Shanghai factory since it opened in 2018. While production at the plant has been temporarily impacted by both coronavirus-related restrictions and scheduled maintenance in the past, this is the first instance of voluntary reduction in output.
Wedbush analyst Dan Ives commented: “With China the core linchpin to the Tesla bull thesis, worries are growing around what the softening demand picture looks like for 2023 given the dark macro clouds and increasing domestic EV competition.” Ives also reduced his fourth-quarter delivery targets for Tesla from 450,000 to 410,000.
Ives discussed the current view of Tesla CEO Elon Musk, writing: “At the same time that Tesla is cutting prices and inventory is starting to build globally in face of a likely global recession, (CEO Elon) Musk is viewed as ‘asleep at the wheel’ from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm.”
On Tuesday, Tesla’s shares experienced a decline of 11.05 percent and were trading at $109.53 per share, the lowest point since August 2020. This drop extends the stock’s overall decline in 2022 to approximately 72.6 percent.
A considerable portion of Tesla’s decline in 2022 happened in April, when Musk announced his intention to purchase Twitter. Musk contested the deal, but it was ultimately approved shortly before a hearing in Delaware Chancery and valued the social media company at $44 billion.
According to Bloomberg, Musk borrowed approximately $13 billion from a banking group for the Twitter acquisition, including $3 billion in unsecured debt with an annual interest rate of 11.75 percent. The remaining portion of the debt consisted of $6.5 billion in term loans and $3 billion in secured bonds.
Twitter is reportedly losing a significant amount of money, and Musk has been selling large amounts of Tesla stock. In mid-December, filings showed that Elon Musk sold approximately 22 million shares of Tesla, worth around $3.6 billion, despite stating earlier in the year that he had “no further TSLA sales planned” after April 28.
Read more at the Street here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan