This year, Tesla stock has declined by over 25 percent as of February 6. The decrease escalated after the company’s Q4 Earnings Call, in which concerns were raised about Tesla’s lack of annual guidance, absence of narrative on price cuts, and a general lack of strategy. Despite this, firms are still trying to understand the stock’s outlook as Tesla prepares to launch its next-gen platform in 2025, describing this as the middle of “two growth waves.”
While Tesla operates differently from traditional car companies, it shares similarities in how it updates its models. Unlike many OEMs that retain the same nameplates for years, Tesla constantly evolves its vehicles through software updates and has updated or introduced new models in recent years. Price cuts by Tesla are not necessarily due to aging products but are more likely aimed at stimulating demand.
Tesla’s increasing focus on governance concerns may limit long-term investment and innovation, leading to potential increased volatility. Following this, Tesla hinted at possibly moving its state of incorporation from Delaware to Texas. In light of these developments, Tesla shares saw a 1.23 percent increase on the East Coast as of 11:40 a.m.