Tesla has plummeted 12% this year alone due to various negative factors, losing about $100 billion (about 131 trillion won) in market capitalization.
Recently, Tesla is facing various crises. △ The Berlin factory was temporarily closed due to logistics problems due to the blockage of the Red Sea due to Houthi rebel attacks, △ The wages of American workers were increased, △ Prices were reduced in China, △ Global rental car company Hertz introduced electric vehicles. Bad news is occurring simultaneously, including the sale of part of the company.
◇ German Gigafactory temporarily closed due to Red Sea blockade
: First, Tesla temporarily suspended operations at its Gigafactory in Berlin, Germany.
Tesla announced on the 11th that it would temporarily close its Berlin factory from January 29 to February 11. This is because a shortage of parts occurred due to changes in transportation routes due to attacks by Houthi rebels in the Red Sea.
Tesla explained in a statement, “The armed conflict in the Red Sea and the resulting change in shipping routes between Europe and Asia via the Cape of Good Hope are disrupting the supply of parts to the Berlin plant.”
◇ Wage increase for American workers
: Tesla also increased wages for American workers. Wage increases lead to increased costs, which eats into net profits.
As the United Automobile Workers (UAW) attempted to form a union at Tesla as well, Tesla appears to have raised wages by ‘crying and eating mustard’ in order to prevent the formation of a union.
Tesla CEO Elon Musk dislikes labor unions so much that there is no union at Tesla so far.
◇ Price reduction in China
: Price cuts in China are also a factor pressuring profit margins.
Tesla announced on its official Chinese website on the 12th that it would cut the price of its basic model, Model 3, by 5.9% and the price of its Model Y sports utility vehicle (SUV) by 2.8%.
Tesla’s price cut appears to be a desperate measure, as its biggest competitor, China’s BYD, is making rapid progress. BYD sold more electric cars than Tesla in the fourth quarter, surpassing Tesla and becoming the world’s largest electric car company.
◇ Sale of Hertz electric vehicles
: The decision by global rental car company Hertz to sell electric vehicles is also major negative news for Tesla.
Hertz announced on the 11th that it decided to dispose of 20,000 units, or about a third of its electric vehicles, as it judged that demand for existing gasoline vehicles was still strong.
Hertz explained that electric vehicle maintenance costs are higher than gasoline vehicles, and consumers also prefer gasoline vehicles due to the inconvenience of the charging process.
Hertz added that it plans to purchase more gasoline vehicles using the proceeds from the sale of electric vehicles.
In particular, Hertz has reportedly canceled its goal of converting 25% of its fleet to electric vehicles by the end of 2024.
As bad news erupts all at once, Tesla is plummeting every day. It fell 9 trading days in the last 10 trading days, and the stock price fell below the 200-day moving average.
As a result, Tesla plummeted 12% this year, losing about $94 billion (about 123 trillion won) in market capitalization, according to Bloomberg.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.