:max_bytes(150000):strip_icc()/GettyImages-1768359670-982f85174a5542f6b7dcf355997dfd83.jpg "Tesla Stock Plunges as 2024 Volume Growth Hits the Brakes—Key Price Levels to Monitor")
Key Takeaways
- Tesla shares traded sharply lower after missing Wall Street’s fourth-quarter earnings and revenue forecasts.
- The company said 2024 vehicle volume growth may be notably lower than last year due to a lull between Tesla models.
- Tesla shares have been unable to make a decisive breakout from a symmetrical triangle.
Tesla, Inc.
Source: TradingView.com.
Shares in electric vehicle maker Tesla (TSLA) were down nearly 8% in pre-market trading Thursday after the company disappointed investors with its 2024 volume growth outlook and missed the mark on quarterly earnings. Late Wednesday, the company reported an adjusted profit of 71 cents per share on revenue of $25.17 billion, both short of analysts’ expectations. Although total revenue grew 3% from a year earlier, Tesla said a global reduction in the average vehicle selling price stemming from price cuts in the second half of last year hurt the top line.
The company’s operating margin of 8.2% rose slightly on a sequential basis, but fell from 16% in last year’s corresponding quarter due to increasingly intense pricing competition from Chinese EV makers. “If volume’s going to be lower, then my guess is, (Tesla CEO Elon) Musk will probably cut prices and take share. Margins may continue to struggle for a while,” Gary Bradshaw, a portfolio manager at Hodges Capital Management, told Reuters.
Tesla said in its earnings release that 2024 vehicle volume growth may be “notably lower” than last year due to a lull between its Models 3 and Y, which rolled off the production line between 2017 and 2020, and its next generation vehicle, which the company expects to start production at its Texas plant in the second half of 2025. While Tesla didn’t quantify 2024 vehicle volume growth, Wall Street projects a figure of about 20%, representing a sharp fall from 38% last year.
Tesla shares traded within a symmetrical triangle between late April and early December before staging breakouts on both sides of the pattern. More recently, a fall below the triangle’s lower trendline has occurred on lackluster share turnover, indicating no clear direction. Investors should watch for a volume-backed breakout on either side of the market to gain clues on the stock’s next move.
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