Tesla’s Flying Roadster Can’t Stop Over 18 Percent Stock Slide
(MENAFN) A flying Roadster and stronger-than-expected deliveries were not enough to rescue Tesla’s stock, as the electric vehicle (EV) maker struggles to persuade investors that its long-term growth story justifies its price.
The gap between the company’s ambitious technology and its market performance has widened sharply, putting valuations, cash flow and profitability back at the center of the debate. Tesla shares are down more than 18% since the start of the year amid mounting overvaluation fears. The stock fell 3.57% in September and shed another 7.3% last week.
Shares sold off even after a major product event where the automaker unveiled a flying version of its two-seater Roadster sports car. The vehicle relies on 10 nozzles and ultra-high-pressure air tanks to appear to defy gravity.
During the demonstration, the car climbed a steep ramp, hung upside down using suction power, performed a midair somersault and landed after jumping over a row of parked cars. CEO Elon Musk said the self-driving vehicle hit roughly 97 kilometers (60.2 miles) per hour in under one second.
Analysts were unmoved. They cautioned that heavy spending on robotaxis, the humanoid Optimus robot and artificial intelligence (AI) infrastructure has made the path to sustainable revenue harder to pin down.
The debt market echoed those worries. Tesla’s five-year credit default swap (CDS) spread climbed to 188.1 basis points, its highest since May 2023.
Attention now turns to third-quarter results, due Wednesday after US markets close. Quarterly earnings are projected at $28 billion, with earnings per share of $0.45.
The report follows solid operational numbers. Tesla produced 464,391 vehicles, up 3.8% from a year earlier, and delivered 486,532.
In Europe, momentum is strong. Tesla sold 142,165 cars in the EU from January to August, a surge of 65.9%. August sales alone jumped 52.7% to 12,547 units, giving the carmaker a 1.9% share of total car sales in the region.
The gap between the company’s ambitious technology and its market performance has widened sharply, putting valuations, cash flow and profitability back at the center of the debate. Tesla shares are down more than 18% since the start of the year amid mounting overvaluation fears. The stock fell 3.57% in September and shed another 7.3% last week.
Shares sold off even after a major product event where the automaker unveiled a flying version of its two-seater Roadster sports car. The vehicle relies on 10 nozzles and ultra-high-pressure air tanks to appear to defy gravity.
During the demonstration, the car climbed a steep ramp, hung upside down using suction power, performed a midair somersault and landed after jumping over a row of parked cars. CEO Elon Musk said the self-driving vehicle hit roughly 97 kilometers (60.2 miles) per hour in under one second.
Analysts were unmoved. They cautioned that heavy spending on robotaxis, the humanoid Optimus robot and artificial intelligence (AI) infrastructure has made the path to sustainable revenue harder to pin down.
The debt market echoed those worries. Tesla’s five-year credit default swap (CDS) spread climbed to 188.1 basis points, its highest since May 2023.
Attention now turns to third-quarter results, due Wednesday after US markets close. Quarterly earnings are projected at $28 billion, with earnings per share of $0.45.
The report follows solid operational numbers. Tesla produced 464,391 vehicles, up 3.8% from a year earlier, and delivered 486,532.
In Europe, momentum is strong. Tesla sold 142,165 cars in the EU from January to August, a surge of 65.9%. August sales alone jumped 52.7% to 12,547 units, giving the carmaker a 1.9% share of total car sales in the region.
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