Tesla's stock decreased by almost 5% at midday on Monday due to worries spurred by Panasonic, its frequently-associated battery cell provider, about the lack of enthusiasm for electric cars. At Tesla's October 18 earnings call, CEO Elon Musk declared that Tesla was attempting to keep expenses down and prices low for buyers in light of increasing interest rates. Ortex data has ascertained that Tesla short sellers have brought in more than $3 billion since the third-quarter earnings call.
Tesla's shares fell up to 5% on Monday following news that Panasonic, their partner and supplier, had reduced battery cell production in Japan till September 2023. This caused investor worries about a softening demand for EVs, especially those with higher price tags that may not qualify for tax credits or other incentives from government programs. Panasonic's cells are used in Tesla's older, pricier Model X SUVs and Model S sedans.In the company's 3rd quarter earnings call on the 18th of October, CEO Elon Musk had warned shareholders that rising interest rates were putting pressure on the company to reduce the cost of their EVs, which could affect buyers' ability to buy or lease them in the future. Musk also admitted to having "dug [Tesla's] own grave" with the Cybertruck launch, and said on the call that it will be a year to 18 months before the electric pickup truck becomes a positive contributor to the company.Since that earnings call, Tesla's shares have decreased by 18%. Ortex, a London-based financial information services provider, reported that Tesla's short sellers have made $3 billion from the 18th of October to the close on Friday. As of October 27th, the dollar value of Tesla's short interest was around $18.08 billion, or 3.21% of the stocks available float.In a note dated Monday, Toni Sacconaghi from Bernstein predicted that Tesla will have lower margins and underperform in terms of volumes next year. Although the Street is expecting Tesla to deliver 2.3 million EVs in 2021, an increase of 500,000 year-over-year, Sacconaghi wrote that reducing prices by 16% has already pressured the company's operating margins by 750 bps. He went on to suggest that Tesla may have to cut further to meet demand, but this would cause them to become cashflow negative.Bernstein's bearish outlook for Tesla sees them delivering 2.15 million EVs next year and earning $2.59 per share, significantly lower than the consensus view of 2.3 million EVs and $3.30 EPS.The negative sentiment has spread to other parts of the EV market, such as ON Semiconductor, whose stock dropped 20% on Monday after their Q4 guidance was disappointing.
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