Tesla Motors CEO Elon Musk speaks at the Tesla Giga Texas Manufacturing “Cyber Rodeo” grand opening party in Austin, Texas on April 7, 2022.
Shares in electric vehicle maker Tesla have fallen 28% since Oct. 27, when CEO Elon Musk bought Twitter and named himself “Chief Twit,” or CEO, of the social media business.
For comparison, other big automakers like Ford, GM and Volkswagen are up slightly since Oct. 27, as is BYD, a Chinese company that makes electric vehicles and batteries. US electric truck maker Rivian is down 27% during that period.
On Tuesday, Tesla shares closed at $160.95, down more than 4% on the day. It was a rare exception among growth-oriented tech stocks, which mostly rose after cooler-than-expected inflation data came out early in the morning.
The fall in Tesla’s stock price has prompted the company’s largest retail shareholder, Leo Koguan, who is a billionaire and founder of IT services firm SHI International, to call the company’s board to “make a shock therapy to resuscitate the stock price”, that is, by buying back shares.
Musk sold billions of dollars of his Tesla stake to finance the acquisition of Twitter. Since he took over the company, Musk has been regularly posting inflammatory tweets, especially aimed at people who hold center-left political values, and whom Musk often paints as enemies with an “awake mind virus.”
For example, Musk took aim at the director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, and trans people, tweeting over the weekend: “My pronouns are Prosecution/Fauci.”
The offensive tweet drew more than 1 million likes on Twitter, where Musk has more than 120 million followers on the list, as well as criticism from the White House and former CIA director John O. Brennan. White House press secretary Karine Jean-Pierre called Musk’s tweets about Fauci’s personal attacks “incredibly dangerous.”
Kristin Hull, founder of Nia Impact Capital and a Tesla shareholder, wrote on Twitter following that: “So many problems with the Tesla brand, when the board can’t control the CEO.”
Economic conditions and an aging product line have also contributed to pressure on Tesla’s stock price. Tesla has delayed mass production of its sci-fi-inspired trapezoidal pickup, the Cybertruck. Tesla originally showed off the Cybertruck design in 2019, at which point the company hoped to start production in 2021.
The company held an event at its Nevada battery factory to mark the start of deliveries of its heavy-duty, all-electric semi-truck last month. At the event, Tesla executives, including Elon Musk, did not mention the previously touted self-driving technology, a million-mile warranty they had previously mentioned, a price for the Semi, or any anticipated production numbers.
Tesla is also facing backlash over a years-long delay in delivering self-driving technology via software updates to its customers’ cars. Customers are increasingly suing Tesla in the US to get refunds for self-driving systems they paid for and expected to already deliver.
Tesla markets its driver assistance systems as Autopilot, Enhanced Autopilot, and Full Self-Driving capability in the US. None of these systems make its cars safe to drive without a human behind the wheel, attentive to the road and to the task of driving at all times.
The California DMV is investigating Tesla and has formally complained that it has engaged in misleading advertising around these systems.
Some Tesla fans see the stock price plunge as a buying opportunity, despite Musk’s new distraction with Twitter.
The company is ramping up production at a new vehicle assembly plant in Austin, Texas, and another on the outskirts of Berlin. The company brought Shanghai manufacturing leader Tom Zhu to the states to help mature the Austin operation.