Tesla is facing a challenging year, with its stock down almost 32% since January, making it the worst-performing stock on the S&P 500 for over a month. A report by Wells Fargo analyst Colin Langan suggests that Tesla is a “growth company with no growth,” with expectations of flat growth this year and a decline starting in 2025. Factors contributing to this include increasing competition, particularly from China, and struggles to keep up with orders. Additionally, Tesla’s vehicles are depreciating rapidly, contrary to Elon Musk’s 2019 prediction that their value would increase as self-driving capabilities matured. The company has been cutting prices to keep up with slowing demand, which could prove disastrous in the long run. Despite the dropping share price, Langan believes Tesla’s stock is still overpriced considering its earnings and profits.
The company also faces criticism for Musk’s alleged neglect and controversial activities on social media, as well as threats to divert artificial intelligence projects from Tesla. Furthermore, Tesla’s ambition for “Full Self-Driving” technology is fraught with regulatory challenges and competition catching up in driver assistance software.
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