Tesla shares fell below $150 each on Thursday, giving up a year of gains as the automaker struggles with slowing electric vehicle sales and increasing competition.
As the dismal year continued for Tesla investors, the stock fell $5.52, or 3.5%, on Thursday to close at $149.93, putting the stock down more than 39% this year. The stock last traded at the $150 level in January 2023.
Tesla sales plummeted last quarter as competition increased and electric vehicle sales slowed. The company said it delivered about 387,000 vehicles from January through March, which is below analyst expectations and down nearly 9% from the 423,000 it sold in the same period last year.
With Tesla in a slump, news surfaced this week that the company plans to at least cut back 10% of the global workforce in an effort to reduce costs. “There is nothing I hate more, but it has to be done,” Tesla CEO Elon Musk wrote in a memo to employees. “This will allow us to be lean, innovative and hungry for the next growth phase cycle.”
Tesla is expected to report a drop in first-quarter earnings on April 23, and Wall Street will be looking for answers during the company’s conference call. Tesla is also under pressure to make good on its earlier promise of a more affordable EV, called the Model 2, amid reports that the project has been delayed.
“We need to hear the reasons for the cost cuts, the strategy for the future, the product roadmap and an overall vision from Musk, otherwise many investors could head for the elevators during this Category 5 perfect storm of weak demand that Tesla is facing globally . 2024,” analysts at Wedbush Securities said in a report.
Electric vehicle sales rose just 2.7% to just over 268,000 in the first quarter, compared with the 47% jump that set record sales in 2023, according to CBS News Detroit.
For Musk, the timing of the planned layoffs of thousands of employees is difficult. Tesla also filed a report this week shareholders vote again on a controversial $56 billion compensation package awarded to Musk for 2018. A Delaware judge struck down the pay settlement in January after shareholder lawyers argued that Musk had set the terms in sham negotiations with directors beholden to him.
In a proxy filing on Wednesday, Tesla also said it would hold a vote on moving its state of incorporation to Texas from Delaware. Tesla will hold its annual shareholder meeting on June 13.
—The Associated Press contributed to this report.
