Shares of Tesla Inc. dove toward a nine-month low Monday to fuel a broad selloff in the electric-vehicle sector, after a report that the EV giant was losing a large customer in Germany.
The stock
TSLA,
dropped 5% in midday trading, to put it on track for its lowest close since May 18, 2023. The selloff shaved about $29.7 billion off the EV giant’s market capitalization, which fell to $568.7 billion.
That knocked Tesla down to 10th on the list of the highest-valued companies in the S&P 500
SPX,
below ninth-ranked Broadcom Inc.
AVGO,
at $578.6 billion and eighth-ranked Eli Lilly & Co.
LLY,
at $667.6 billion.
Germany-based software company SAP SE
SAP,
SAP,
which has a fleet of 29,000 vehicles, will stop buying Teslas, according to a report from German business daily Handelsblatt, quoting the company’s fleet manager.
Tesla changes its list prices more than other manufacturers, making planning more difficult, the newspaper said. Another issue is that Tesla often delivers earlier than planned, making storage difficult, the report said.
Also read: Hertz cites weak demand, high damage costs in decision to downsize EV fleet
The report comes as Tesla Chief Executive Elon Musk has come under scrutiny over a $56 billion pay package, which a Delaware court essentially nullified, and after a report in the Wall Street Journal over the weekend about how Musk has pressured board members.
Also read: Tesla has ‘massively disappointed’ Wall Street: Here’s how one bull says it can get back on track
Tesla’s stock has tumbled 28.7% to start 2024, making it the worst performer in the S&P 500 in the year to date. Tesla’s market cap at the end of 2023 was $791.41 billion, according to FactSet data. That’s a far cry from Tesla’s record market cap of $1.24 trillion, reached on Jan. 3, 2022.
Read more: Tesla’s stock hasn’t fallen enough — this analyst sees a further 30% downside
The stock’s selloff helped fuel a broad selloff in the shares of other EV makers.
Shares of Nikola Corp.
NKLA,
slid 7%, even after the company announced the opening of its first hydrogen refueling station in Southern California, under the HYLA brand.
Shares of Rivian Automotive Inc.
RIVN,
shed 3.6% and have plunged 35.9% year to date, while Fisker Inc.’s stock
FSR,
slumped 8.3% toward a record low and toward its 15th straight close below $1.
Mullen Automotive Inc.’s stock
MULN,
lost 3%, even after the company tried to reassure investors that demand for its electric delivery vans remained healthy.
“Unlike the consumer EV space, we have not experienced any slowdown in demand for our vehicle lineup in the commercial EV space,” said Mullen Chief Executive David Michery.
For Mullen’s commercial EVs, the issue is about producing enough supply to meet the demand, he said.
“We are steadfastly focused on production, production, production,” Michery said. “We are working through active purchase orders and strengthening our supply chain to make sure we are meeting customer needs.”
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