Tesla Shares Dropped 9% – Here’s Why

October 7, 2022 0 By Alicia Hagen
  • Tesla shares declined by 9% following disappointing 3rd-quarter deliveries.
  • The electric vehicle company expects to deliver 450K cars in the 4th quarter of 2022.
  • Cathie Wood buys Tesla shares.

Tesla (NASDAQ: TSLA) stock plummeted by 9% on Monday. That drop emerged after the electric car manufacturer revealed delivering fewer than expected vehicles in the third quarter, citing logistic troubles as the slow economic growth sentiment increased demand worries.

Tesla Reported Record Deliveries but missed Estimate

The company missed market anticipations with a colossal difference between produced cars and the delivered amount despite record deliveries during the quarter. The shortfall came due to the firm’s failure to secure affordable transportation.

Furthermore, the delivery shortage matches investor and analyst worries about demand amidst soaring Tesla vehicle pricing, surging borrowing costs, and an ugly prognosis for the globe’s economic growth. Consequently, economists have warned about the coming quarters witnessing declined car demand.

Ryan Brinkman of JP Morgan said that the possibility of demand destruction magnifies as Tesla highlights supply challenges limiting deliveries. Tesla expects more than 450,000 vehicle deliveries in Q4 to keep the goal of increasing deliveries by 50% each year. Meanwhile, the automaker plans to produce around 495,000 Model Y and Model 3 cars.

Cathie Wood Bought TSLA’s Monday Dip

Cathies Wood purchased TSLA following the massive 4-month dip after Tesla missed deliveries. Ark Investment Management-backed funds bought 132,213 TSLA shares, representing the firm’s initial buy since mid-June.

Moreover, the acquisition represented Wood’s 2nd Tesla buy this year. She completed her first stake in June after the electric car company lost its status in her fund, a crown it retained for nearly five years. The latest acquisition proves that Wood is in a dip-buying mode.

Bloomberg data shows Ark sold TSLA for five successive quarters until June-end. The Ark Innovation ETF and Ark Next Generation Internet exchange-traded fund completed the buys on Monday. Meanwhile, concerns about the global downturn and previous Fed Reserve compression had Ark’s main ETH falling by 60% this year.

What are your thoughts about Tesla’s business outlook amidst the slowed global economy? You can share your views in the comment area below.