Tesla’s share price has continued to tumble as serious doubts keep being raised about the company’s financial performance and direction. Their share price has nearly halved since last year and it doesn’t seem like it’ll be recovering anytime soon.
The Decline In Model 3
The demand for their Model 3 car has declined, which has led to another reported loss. This could well lead to a cash injection from Elon Musk in order to change the direction that the company is going to be heading in.
Tesla is aiming to deliver 400,000 cars in 2019, but with just 63,000 sales in the first quarter, that’s starting to look extremely unlikely. It will be desperately hoping it can post a profit for the next quarter in order to avoid having to stabilise the business with extra cash.
A Change Of Focus
With low car sales, Tesla have looked into expanding their business into other products and services. This will include the likes of robotaxis and insurance. However, although their core business is struggling, the company doesn’t appear to be too concerned.
They have actually received criticism for designing a new car, the up and coming Model Y. Many investors feel like they should be spending their energy on improving their sales and selling the cars that they are currently making.
Maybe Musk thought that the business was too good to need stringent financial measures, but now it appears as though streamlining is needed. Some poor decisions appear to have been taken in the last few years but it might be time for Tesla to focus their energy on selling.
A Unique Business
There is no doubt that Tesla is a unique business in the car industry. While the likes of Volkswagen have a whole history and capital behind them with which to go into electric cars, it was only ever Tesla’s sole focus.
The share price is currently very low (190.63 USD as of 28th May), which might be attractive to some. As long as they start making the right decisions, their value might rise once again.