Tesla shares plunge to lowest price in two years as Elon Musk ‘asleep at the wheel’

 (REUTERS)
(REUTERS)

Tesla shares fell to their lowest in more than two years amid growing concerns about Elon Musk’s leadership and delays in their Chinese production lines.

The electric carmaker’s stock has lost more than half its value since the start of October.

Investors are worried Musk is ‘asleep at the wheel’ given how much of his time is now devoted to Twitter since becoming the social network’s owner.

Tesla’s stock has dropped 73 per cent from a record high in November 2021.

Companies like Tesla and Apple have struggled to keep production going in China due to a staffing crunch as Covid restrictions lift.

Analysts say a spike in coronavirus cases in key manufacturing hubs means production will take time to ramp up once again.

According to reports, Tesla temporarily suspended production at a factory in Shanghai. That news sparked worries of a drop in demand in the world’s biggest car market.

Thomas Hayes, chairman of Great Hill Capital, citing a delivery forecast cut by Tesla’s Chinese rival Nio, said: “There’s no question there are demand fears.”

Simon Baptist, chief economist at The Economist Intelligence Unit, said: “Factories are going to experience labour shortages for at least four to six weeks as the wave passes through their production regions, and of course most migrant workers will go back to their home villages for the Lunar New Year at the end of January.

The Tesla Lucid Air (Tesla)
The Tesla Lucid Air (Tesla)

“Production looks unlikely to be back to normal in China until late February.”

Reuters news agency analysis shows prices of used Tesla cars are falling faster than those of other carmakers.

Musk previously attributed Tesla’s recent struggles to rate hikes from the Federal Reserve.

The billionaire sold $4billion of his own shares in Tesla to finance the deal to buy Twitter for $44bn.

Experts have raised the possibility of Musk being asked to step down as owner of Tesla over his actions at Twitter. He is already facing a lawsuit over his alleged failure to focus on Tesla due to outside ventures.

Last week, Musk asked users in a Twitter poll if he should continue as the head of the platform. They voted no, prompting him to announce that he would resign once a replacement is found.

Tech analyst Dan Ives, of Webush, said: “Musk is viewed as ‘asleep at the wheel’ from a leadership perspective for Tesla at the time investors need a CEO to navigate this Category 5 storm.

“Instead Musk is laser-focused on Twitter which has been an ongoing nightmare that never ends for investors.”