This last Wednesday saw Tesla stock drop once again. The most plausible and obvious reason why Tesla stock is down would be the market. However, there is another possible cause, that being Munich. More specifically, the IAA Mobility show.
Just previously, on Tuesday, an analyst from Deutsche Bank was at this Munich auto show. There, he met with the management team present from Tesla. Supposedly, their topics of discussion had a mix of the good and the not-so-good.
This analyst had several things to say. When it came to the bad, he had some things to say about investor disappointment with profits in this last quarter (the third one). The prime reason for this appears to be Tesla slowing down production to get some rest. This may then have reduced deliveries of their vehicles and cut profits. So, this may have had an effect on those buying stocks in Tesla.
Does Positive News Mean that Tesla Stock Will Go Up?
There was also positive news, of course. This year, they managed to purchase their raw materials for lower prices than usual. This would have improved their profitability overall, which may have made up for the lack of deliveries. However, these discounts were not really present at the start of the year, only recently taking effect. So, it may not have made up too much for the decline in profits.
In the second quarter, Tesla managed to sell 466,000 automobiles, and their profit margins stood at almost 10%. To compare, the second quarter of last year saw a profit margin of 15%. This quarter is looking pretty similar, according to analysts, who expect 470,000 vehicle sales. Again, they expect around a 10% profit margin.
Another reason why Tesla stock is down is price cuts. Tesla has had to make discounts on their vehicles due to upcoming competition. This process has been much faster in 2023. This has worried investors considerably. After the last quarter, we saw a drop of 10% in the value of Tesla’s stock. So, will Tesla stock go up at some point? We will have to wait and see what happens after these last results.
