Rocky ride: Tesla stock on pace for worst year ever

Dec 27, 2022, 8:28 PM | Updated: Dec 28, 2022, 10:31 am
FILE - A Tesla logo is seen at the company's store in Denver's Cherry Creek Mall on Feb. 9, 2019. O...

FILE - A Tesla logo is seen at the company's store in Denver's Cherry Creek Mall on Feb. 9, 2019. Owning Tesla stock in 2022 has been anything but a smooth ride for investors. Shares in the electric vehicle maker are down nearly 70% since the start of the year, on pace to finish in the bottom five biggest decliners among S&P 500 stocks. (AP Photo/David Zalubowski, File)

(AP Photo/David Zalubowski, File)

LOS ANGELES (AP) — Owning Tesla stock this year has been anything but a smooth ride for investors.

Shares in the electric vehicle maker are down nearly 70% since the start of the year, on pace to finish in the bottom five biggest decliners among S&P 500 stocks. By comparison, the benchmark index is down about 20%.

While Tesla has continued to grow its profits, signs of softening demand and heightened competition have investors increasingly worried. And then there’s CEO Elon Musk’s acquisition of Twitter. Some of Musk’s actions since taking over the social media company, including doing away with a content moderation structure created to address hate speech and other problems on the platform, have unnerved Twitter’s advertisers and turned off some users.

That’s stoked concerns on Wall Street that Twitter is taking too much of the billionaire’s attention, and possibly offending loyal Tesla customers.

Musk’s acquisition of Twitter opened up a political firestorm and has caused Musk and Tesla’s brand to deteriorate, leading to a “complete debacle for the stock,” Wedbush analyst Dan Ives wrote in a research note this week.

Musk has said that he plans to remain as Twitter’s CEO until he can find someone willing to replace him in the job.

Despite Musk’s focus on Twitter, Tesla’s results have been solid this year. The Austin, Texas, company posted year-over-year profit and revenue growth through the first three quarters of 2022, including more than doubling its third-quarter profit from a year earlier.

Still, electric vehicle models from other automakers are starting to chip away at Tesla’s dominance of the U.S. EV market. From 2018 through 2020, Tesla had about 80% of the EV market. Its share dropped to 71% in 2021 and has continued to decline, according to data from S&P Global Mobility.

This month, in a rare move, Tesla began offering discounts through the end of the year on its two top-selling models, a sign that demand is slowing for its electric vehicles.

Ives predicts that Tesla will likely miss Wall Street’s estimates when the company reports its fourth-quarter results, citing higher inventory levels, the recent price cuts and overall production slowdowns in China. He also expects a “softer trajectory for 2023.”

“The reality is that after a Cinderella story demand environment since 2018, Tesla is facing some serious macro and company specific EV competitive headwinds into 2023 that are starting to emerge both in the U.S. and China,” Ives wrote.

Still, Ives is optimistic that Tesla’s long-term prospects remain solid as the global market for electric vehicles grows — and Musk refocuses on Tesla.

“However, any further Musk strategic missteps will be carefully scrutinized by the Street and further weigh on shares,” he wrote.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Police: 2 Pakistani Taliban commanders killed in northwest

PESHAWAR, Pakistan (AP) — Pakistani police killed two commanders from a militant group in the country’s northwest, a local officer said Saturday. Pakistan has increased its operations against militants after a surge in violence by the Pakistani Taliban, or TTP, particularly in the northwest Khyber Pakhtunkhwa province. The TTP ended its cease-fire with the government […]
1 day ago
FILE - John Lydon attends the LA premiere of "Punk" at SIR in Los Angeles, Monday, March 4, 2019. P...
Associated Press

Punk icon Lydon fails in bid to play Eurovision Song Contest

LONDON (AP) — Punk icon John Lydon has failed in his attempt to become Ireland’s entry for the pop music competition the Eurovision Song Contest. The former Sex Pistols frontman entered the song “Hawaii” with his post-punk band Public Image Ltd. in the national runoff for May’s continent-wide contest. Jurors and viewers of a televised […]
1 day ago
A vendor sits at a flea market in Kyiv, Ukraine, Saturday, Feb. 4, 2023. (AP Photo/Daniel Cole)...
Associated Press

Dozens of soldiers freed in Russia-Ukraine prisoner swap

KYIV, Ukraine (AP) — Dozens of Russian and Ukrainian prisoners of war have returned home following a prisoner swap, officials on both sides said Saturday. Top Ukrainian presidential aide Andriy Yermak said in a Telegram post that 116 Ukrainians were freed. He said the released POWs include troops who held out in Mariupol during Moscow’s […]
1 day ago
FILE - The British frigate HMS Portland heads through the Suez canal, in Ismailia, Egypt Wednesday,...
Associated Press

Royal Navy sailors hospitalized after drinking water on ship

LONDON (AP) — A Royal Navy warship has returned to port in Britain after several sailors got sick from the vessel’s drinking water, officials said Saturday The navy said frigate HMS Portland had returned to its base at Portsmouth on England’s south coast on Friday “as a precautionary measure, following an issue with one of […]
1 day ago
FILE - An American flag is flown next to the Chinese national emblem during a welcome ceremony at t...
Associated Press

China plays down Blinken’s canceled visit over balloon

TAIPEI, Taiwan (AP) — China played down the cancellation of a visit by U.S. Secretary of State Antony Blinken after a large Chinese balloon suspected of conducting surveillance on U.S. military sites roiled diplomatic relations, saying that neither side had formally announced any such plan. “In actuality, the U.S. and China have never announced any […]
1 day ago
In this photo provided by Melissa Smith, a train fire is seen from her farm in East Palestine, Ohio...
Associated Press

50-car train derailment causes big fire, evacuations in Ohio

EAST PALESTINE, Ohio (AP) — A train derailment and resulting large fire prompted an evacuation order in an Ohio village near the Pennsylvania state line on Friday night, covering the area in billows of smoke lit orange by the flames below. About 50 cars derailed in East Palestine as a train was carrying a variety […]
1 day ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Rocky ride: Tesla stock on pace for worst year ever