Not even Elon Musk’s Tesla—which was touted as a vehicle manufacturing unicorn meant to dent the climate crisis—can withstand those pesky macroeconomic trends. Tesla’s valuation has just fallen as the electric vehicle market seriously cools down.
Tesla’s reduced valuation follows the company announcing earlier this month in an earnings call that it would be reducing its growth expectations, seemingly due to lower demand for electric vehicles, according to a Bloomberg report. The EV company’s stock fell 18.7% following the call and a total of 21.1% for the entire month of October, as reported by Marketwatch. This is apparently the worst monthly performance for Tesla since December 2022.
The EV market is on unstable ground, and Tesla is not the only company that’s noticed. Both Hertz and Ford would be re-evaluating their investments in electric vehicles last week. Hertz apparently wasn’t prepared for the high amount of wear and tear on the EVs Uber drivers rent from the company. Therefore Hertz moved those EVs into the supply that could be rented out for leisure driving—which has left the car rental company with a lot of electric vehicles. Similarly, Ford announced that it was pausing its planned $US12 billion investment in EV manufacturing, citing a reduced demand for EV purchasing.
That said, Tesla is not the only one of Musk’s companies that’s struggling. Musk’s social media venture X received an updated valuation, or should we say devaluation, by Fidelity on Sunday, which is one of the banks that financed the billionaire’s initial purchase.
Fidelity wrote down its valuation of Musk’s company an additional 8% this September, with the bank reducing its valuation a total of 65% over the prior 11 months. In May, Fidelity estimated that X was worth 33% of the initial $US44 billion Musk initially paid for it. Things were looking up in the following months when Fidelity marked up the company’s value by 11% in July and 8% in August, only for things to continue to crater shortly thereafter.