Tesla, Owned by Elon Musk, Lost $109 Billion in a Single Day Due to a Bleak Prognosis for 2022

Tesla’s market value took a real dip by about $108 billion in a single day after the automaker’s fourth-quarter earnings and outlook failed to please the investors.

According to Bloomberg, the shares of the electric vehicle manufacturer fell roughly about 12% on Thursday. Tesla shares closed at $829 in New York on that day, its lowest level since the 14th of October last year. 

The Main Reason for the Plummet

In the fourth quarter, Tesla produced around 306,000 vehicles, up 70% over the previous year but still, the investors were not interested in investing in the company. The drop in the market value was largely due to the automaker’s lacklustre earnings and failure to introduce any new vehicles.

Tesla placed a greater emphasis on creating a humanoid robot called Optimus Was nothing like introducing a new vehicle that failed to wow the investors. 

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A New Low-budget Electric Car in 2022?

Elon Musk, the richest man in the world and the CEO of Tesla, stated that the business will not release any new electric vehicles in the upcoming year.

According to him, the company would be looking at possible plant locations in 2022 to determine what makes the most sense, with a major announcement at the end of this year.

The plummet, however, occurred at a time when many believed that Musk would release an updated product roadmap to the public, including details on the Cybertruck, Semi truck, and a more affordable Tesla.

It has been long rumored that Tesla has been working on a new electric car with a possibility of a price tag as low as $25,000.

However, for the time being, the automaker has ruled out the prospect of such a project and has been concentrating on artificial intelligence and self-driving technology instead.

Experts feel that the future of the company will be harmed by the lack of fresh product vision at a time when competition is high and several traditional legacy automakers and EV startups are working feverishly on a slew of new electric car projects. Experts believe that Tesla’s growth will be stifled and some other EV-making companies will take the leash. 

Elon Musk
Elon Musk

The Financials

The shares of the EV giants fell 12% on the revelation that it would not be building any new electric vehicles, ending at $829. This was also the second time that Tesla’s market value dropped by more than 100 billion dollars in a single day.

A similar drop was observed last year in November. Musk claimed that the upcoming year will be a watershed moment for Tesla and electric vehicles generally where the company can take risks. In 2020, Tesla had a profit of up to 721 million dollars which raised to 5.5 billion dollars last year. In total, the company delivered up to 936,000 automobiles. 

A Warning to the Shareholders

Tesla warned the shareholders on its results call on Wednesday that supply chain concerns could stymie growth this year, prompting the sharp dip on Thursday. Tesla’s stock price on $1200 but the price dropped down to $830 per share on Thursday’s market closed.

Tesla started its plants had been operating below the maximum capacity for several quarters as the supply chain had become the primary restricting factor. The trend is expected to continue until the end of this year. 

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Is Musk Still the Richest in the World?

The start to Musk’s financial year was solid, but he has had a few speed bumps on the way. After Tesla declared that it would deliver more than 936,000 cars in 2021, his worth reached $304 billion in early January, making him the only person ever to cross the 300 billion dollar mark.

However, Tesla’s stocks took a dip of about 25% leaving him 80 billion dollars in the red in less than a month. It is unusual for a billionaire to lose 10% of his worth in a single day and still stand as the richest man in the world.

The Tesla shares were as high as $1208 in November when Musk crossed his 300 million dollar mark. He now stands tall as the richest man followed by the LVMH CEO Bernard Arnault at 188.6 billion dollars and the CEO of Amazon Jeff Bezos at 165 billion dollars.

Musk’s net worth increased by 116 billion dollars in just one year and after a 10% drop in his worth, he still stood higher than his competitors.  

The Tesla owner’s company might have a trip down right now but the vision of the person is unmatched, and it is expected that he would recover the lost amount in just the next few months. 

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