Tan Kin Lian - Investment Journey Tesla dropped 8% on 30 Oct 2023
The stock price of Tesla was at $210 on 30 Oct 2023. It dropped 8% to $194 due to fear of weaker demand for electric vehicles. 

These electric vehicles are more expensive than conventional vehicles (i.e. combustion vehicles). Due to high interest rate and weaker consumer demand, the sales of EV were slower than projected.

A semi conductor business, called ON Semiconductors, reported weaker demand for their chips that are used for EVs. Panasonic, a Japanese manufacturer, also reported weaker demand for their batteries used for EVs. 

These two news caused Tesla stock price to drop by 8% during the session. 

I held the view that the drop was overdone. The slower demand would impact other EV manufacturer more than Tesla, as these manufacturers were losing money on their production of EVs.

Shortly, there were reports that the other manufacturers, namely Volkswagon, Ford and General Motors, cut down or temporarily stopped their production of EVs. They could not continue with their large losses. They announced that they will increase their production when the economic conditions improve. 

The production cuts of these manufacturers benefitted. Tesla. The stock price of Tesla recovered all of the 8% loss in two days. The current price is now back to $211. 

My confidence in Tesla helped me to tide over these difficult days. Actually, I was lucky.

Tan Kin Lian


 

Add Comment

---