It’s been a while since the entire tech sector has been facing a downtrend. The S&P 500, which is the stock market index for the 500 largest tech companies is also facing a huge downtrend.
For several weeks, the situation of the stock markets has continued worsening and things are not getting resolved at all. It is mainly due to the skyrocketing interest and the inflation rates that the entire market is suffering.
Tesla’s Situation
The largest electric vehicle (EV) maker is also facing the same downtrend. Surprisingly, its situation is worse than most of the tech and EV companies that are publicly listed.
There are many factors that are impacting the overall situation of Tesla in the global market. These factors are worth mentioning as they have a direct impact on the valuation and stock prices of Tesla.
Regulatory Actions
The first factor impacting the stock market situation of Tesla is the regulatory actions being taken against the EV giant. The US regulators as well as the Chinese regulators are after Tesla for its autonomous software as well as quality issues.
The autonomous software that enables cruise control and driving in the EVs had reportedly malfunctioned in many vehicles. This led to many accidents and cases that were filed against Tesla in the United States.
Then there were quality-related issues against Tesla in China pertaining to the autonomous software update. It was causing auto-steering and issues with the cruise control features. Tesla had to recall several hundred thousand units from China costing the company a huge slump in funds and reputation.
Competitors Gaining in On Tesla
In the United States, companies such as Ford and General Motors have started producing EVs on a large scale. They are giving a tough time to Tesla in the US market. Ford has even gone on to claim it will overtake Tesla’s overall EV sales in the US in the next few years.
In Europe, car manufacturing giants such as Volkswagen Group, BMW Group, Stellantis, Hyundai Motor Group, and many more are challenging Tesla. Volkswagen Group has been teasing Tesla that it’ll produce more electric vehicles than Tesla in the upcoming years and has stats supporting it.
In China, which is the largest market for electric vehicles, local EV companies such as Nio, XPeng, Li, BYD, and SAIC Motor are huge competitors of Tesla.
They are playing a huge role in lowering the demand for Tesla in the Chinese market.
Recent Price Hikes
Due to the recent hikes in inflation and interest rates, Tesla has made a harsh decision of hiking the prices of their electric vehicles. Tesla has announced that due to the constant rise in supplies, materials, and labor, they have increased the price of Model Y vehicles to $65,990.
Due to the recent hike, it is expected that the share prices of Tesla may experience another plunge in the upcoming days. From the beginning of 2022 until now, Tesla shares have dipped by -38.47%. The share prices of Tesla may experience yet another plunge after the recent update.