SILICON VALLEY – Tesla Inc’s (TSLA.O) shares have fallen approximately 7% after Chief Executive Elon Musk and team’s four-hour presentation failed to meet investors’ expectations. Investors were anticipating an announcement on an affordable electric car and a plan with a concrete timeline.
Musk and over a dozen executives presented plans to cut assembly costs by half, invest in a new plant in Mexico, and discussed the company’s innovation in managing its operations at its investor day on Wednesday. The presentation, where Musk unveiled the EV maker’s ‘Master Plan 3,’ was short on details about the timeline or any new Tesla products.
“The markets were primed for a big announcement, perhaps on something like a more affordable new model,” said Russ Mould, investment director at AJ Bell.
Tesla’s stock had lost about two-thirds of its value in 2022 but has climbed more than 60% so far this year. “Musk and company failed to put the cherry on top — an actual look at a lower-priced Tesla, if only just conceptually,” said Jessica Caldwell, executive director of insights at Edmunds.
Tesla’s events have created a stir on the internet in the past, with Musk’s dance moves at the opening of the company’s Berlin plant in 2022 and an event in China in 2020 going viral on social media.
The company’s plan to use 75% fewer silicon carbide vehicles without compromising the performance or the efficiency of the car also weighed on semiconductor makers and shares of suppliers STMicroelectronics (STM.PA) and Wolfspeed Inc (WOLF.N). The reduction plan was “bad news for the whole silicon carbide production chain and in particular for STMicro,” Brokerage Equita said.
STMicroelectronics U.S.-listed shares fell about 6%, while those of Wolfspeed dropped 12% in early trading. It remains to be seen how the market will react to Tesla’s lack of announcements for an affordable electric car and timeline. – Reuters