Tesla stock erases $245 billion from its market value

Since the beginning of the year 2024, Tesla shares have declined by 32%, and this decline has erased more than $245 billion from the company’s market value, pushing it out of the list of the 10 largest companies in the S&P 500 index. This also cost Musk his position as “the richest man in the world.” “He now ranks third behind Bernard Arnault and Jeff Bezos.

The electric car maker’s stock is now the worst-performing component of the S&P 500 index this year, surpassing Boeing’s nearly 30% loss since the beginning of 2024.

The decline came after Wells Fargo downgraded its rating to underweight (equivalent to sell) from equal weight. Analysts described Tesla as a “growth company without growth.”

Colin Langan of Wells Fargo said, “There will be no growth in the volume of sales of the electric car maker this year, and also in 2025, it will be worse, as volumes will decrease.”

He continued, “The reason is clear: Tesla’s ability to grow at the tremendous pace promised by its expensive valuation is no longer a guarantee.” The company still trades at a much higher multiple than other major companies, but the pace of expansion in its revenues and profits has slowed significantly since last year.”

The problems facing Tesla and electric vehicles began to become more widespread in mid-October, when Musk first warned of slowing demand. But sentiment worsened further in early January after Tesla said its growth would be “significantly lower” this year. Other automakers, electric vehicle suppliers and even car rental companies joined in similar cautious comments.