Tesla shares down 6% as investors fear further cheapening of electric cars

Tesla has set a new record for electric vehicle deliveries. More than 400,000 vehicles were shipped in the first quarter of 2023. One of the reasons for the increase in demand was lower prices, but the stock price has fallen because of this.

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Investors fear that Elon Musk's electric cars will continue to fall in price. This is a necessary step to meet one of its targets, which is to deliver 1.8-2 million vehicles by the end of all of 2023.

Analysts expect the profit margin at the end of the first quarter of 2023 to drop to 20%. For comparison, at the end of 2022, the figure was at 29%. For this reason, Tesla securities fell in price by 6%.

The price policy is positively influenced by the cost of raw materials used in battery production. The share of batteries can reach 50% in the cost of electric cars. This situation may allow other companies to outlive the time if Tesla continues to reduce the cost of its cars.

Source: Reuters