Hi everybody, welcome back to the Elon Musk podcast.
Today we're going to be diving into some recent challenges that
Tesla has faced in the stock market, which has raised
questions about the stability of the EV sector as a whole.
And in less than two weeks, Tesla shares have plummeted
nearly 20% and this drop has had a ripple effect casting down on
the future of the electric vehicle industry.
There's been a chain reaction of concerning statements from auto
manufacturers, Wall Street analysts and key suppliers like
Panasonic and ON Semiconductor. But before we get into that, I
want to tell you about our Patreon.
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below, too. So what's causing this downturn?
Could this be a sign of slowing demand for electric cars or is
there more to the story? Now we're going to be unpacking
this issue in about 5 separate segments today.
We're going to be exploring the factors that are affecting Tesla
stock in the state of the EV market, labor unions, and what
this could mean for the future of automotive technology.
Now, the downturn in Tesla stock was initially triggered earlier
this month when the company adjusted its growth expectation
during its third quarter earnings call.
This surprised many investors and was soon followed by ominous
statements from global automakers and Wall Street
analysts alike. Panasonic, a major battery
supplier, and ON Semiconductor, a key chip maker for the EV
industry, also issued warnings about the state of the market.
The collective alarm has cast a shadow not just on Tesla but
also on the US automotive sector as a whole.
Interestingly, Morgan Stanley analyst Adam Jonas positive that
the billions of dollars invested in the EV sector could actually
be destroying value rather than creating it.
And while the traditional automotive market is also
struggling, mainly due to the high interest rates, the young
and vulnerable EV sector appears to be taking the brunt of these
negative market effects now. Meanwhile, the labor union
situation in the United States is causing additional
disruption. General Motors recently struck A
tentative deal with United Auto Workers union following similar
deals by Ford and Chrysler owned Stellantis.
And while some analysts speculated these labor
negotiations could have offered Tesla a competitive edge, that
theory didn't really pan out. And since the labor disputes
began, Tesla shares have plummeted even more drastically
than those of its American competitors, General Motors and
Ford. Now a clear picture is emerging.
Tesla isn't just facing a softening EV market, it's
dealing with multi front challenges.
These include labor pressures and supply chain issues
alongside the macroeconomic factors affecting the auto
industry as a whole. ON Semiconductor.
That's ON Semiconductor and Panasonic 2.
Suppliers for Tesla provided the market with further signals that
all might not be so well. An ON Semiconductor has a
substantial share in the automotive sector, supplying
chips to companies with a hefty slice of global EV sales.
Their disappointing forecast has had a direct impact on Teslas
already shaky share prices. Similarly, Panasonic's reduction
in battery production was underscored by lower demand for
Tesla's high end models in North America.
And what's particularly noteworthy, these supplier
warnings essentially echoed Elon Musk's own cautious statements
from earlier this month. He noted that the combination of
higher for longer borrowing costs and slowing uptake for
Tesla's Model S and Model X could potentially lower overall
vehicle demand. And one can't discuss Tesla's
falling stock without looking at the contributions of the
supplier such as Panasonic and ON Semiconductor.
Panasonic recently reduced its automotive battery production,
citing decreased demand for high end EVs in North America.
And the ripple effect of this decision permeated market
sentiment, reinforcing existing concerns that Tesla premium
models may not be as invincible as once thought.
ON Semiconductor, a key supplier for not just Tesla but the whole
auto sector further dampen investor spirits the chip
makers. Conservative sales projections
revealed potential market wide weaknesses and the company has a
massive footprint in the EV industry, providing essential
components to the top global EV manufacturers, including leading
Chinese brands. Thus, when ON Semiconductor
speaks, the market listens, often with worry and Tesla's
stock declined was also echoed by the dismal performance of ON
Semiconductor shares, which fell around 19%.
This tandem slide could signify that the factors affecting Tesla
are not isolated, but symptomatic of an industry wide
issue. Notably, ON Semiconductors
products are pivotal in the construction of electric
vehicles, mainly focusing on power management.
A fall in demand for such a fundamental component serves as
a bellwether for investor concerns across the whole EV
industry. Interestingly, investors now
find themselves grappling with the chicken or the egg scenario.
Did warnings from automotive companies like Tesla and General
Motors catalyze on semiconductors?
Cautious outlook, or was it the other way around now?
Either way, the combined impact of these major players
introduces A sobering effect on the market, causing investors to
reassess the volatility and future growth of the electric
vehicle industry. Now at this point, Tesla's road
ahead is uncertain. The company has lost the
staggering of $145 billion in market capitalization, and
investor sentiment seems to be growing increasingly skeptical.
Not just Tesla, though. The ripple effect is being felt
across the whole sector and even among traditional automakers who
are planning to go electric. Tesla remains A dominant player
in the EV field. But as this recent downturn
shows, no company is immune to market forces and economic
realities. What this means for the future
of Tesla in the broader EV market remains to be seen.
It looks clear in the positive, but the road ahead is going to
be far from smooth now. Thank you again for tuning into
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