As the whole markets come crashing down, Tesla stock price tanked 11.62% on Tuesday closing at $560 levels. With the Tesla production taking a massive hit, analysts are slashing the target for its stock price.
Almost every stock on the market has taken a severe beating over this week’s market massacre amid coronavirus spread, and Tesla Inc (NASDAQ: TSLA) is no different. Just over the last five days, the Tesla (TSLA) stock price has crashed over 20%. On Thursday, Dow Jones closed 10% lower losing over 2300 points in the market and moving below 21,500 levels.
Tesla stock also closed 11.62% down crashing all the way down to $560 levels. After hours TSLA has lost another 7%. Tesla has been one of the top performers of Wall Street until mid-February with its price surging all the way above $900. From its 2020 high, the Tesla stock has crashed nearly 40% as of now.
Morgan Stanley analyst Adam Jonas has further cut down the target for the Tesla (TSLA) stock to $80 from the previous target of $500. The massive coronavirus spread in China and across the globe has affected businesses severely. Tesla, who launched its Shanghai gigafactory earlier this year, is facing a major jolt to its manufacturing output. In a note to investors, Jonas wrote:
“While acknowledging the situation remains fluid, we are marking to market our forecasts for Tesla in the midst of the COVID-19 pandemic, mainly to adjust for lower expectations of growth outside of China”.
He also added that while Tesla is currently in a “pole position” in the electric vehicle market, its products are still expensive and discretionary. Jonas said:
“We believe it is reasonable to assume that sentiment and financial strength will likely in some way be impacted by the sharp correction in global markets as well as the concerns around public safety and interruption in personal mobility”.
Chinese Government Hauls Tesla Over Consumer Complaints amid Coronavirus
Last week, a number of Tesla’s customers in China complained of having received old modules of electronics for their newly purchased Tesla 3 models. The customers complained of having received the older generation and slower chips installed in their new purchase. The situation escalated fast and Chinese users even threatened to boycott the company.
Tesla has agreed to ship older chips with their Model 3s. Moreover, it cited the shutdown due to coronavirus as the reason behind it. The company said that since it had to shut down its gigafactory on account of the virus outbreak, its supply chain has been totally disrupted.
China’s government authorities have come down hitting hard on Tesla’s move, reports Nikkei Asia Review. China’s Ministry of Industry and Information Technology has summoned Tesla’s executives and asked them to explain this move. A statement coming from the Ministry on Tuesday reads:
“The ministry has ordered Tesla to immediately rectify the problem according to related regulations”.
Tesla has assured all its affected customers that once production resumes to normalcy, the company will give a free hardware upgrade. Weel, while some consumers are ok with Tesla’s call, some are not. In fact, some customers are also seeking a class-action lawsuit seeking damages three times the Tesla Model 3’s cost. “Tesla needs to pay for what they have done,” one owner told Nikkei.
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