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Tesla Stock Dips 3.70% Amid Mounting Operational and Financial Struggles

AInvestMonday, Oct 7, 2024 6:30 pm ET
1min read

Recently, Tesla has experienced a series of challenges that have sparked considerable discussion among investors and the public. On October 7th, Tesla's stock fell by 3.70%. The company's financial data, as of June 30, 2024, revealed a total revenue of $468.01 billion, a year-over-year decrease of 3.02%. Moreover, its net income of $26.07 billion marked a significant reduction of 50.02% compared to the previous year.

Adding to the company's financial hurdles, Tesla received a continued "Underperform" rating from Sanford C. Bernstein & Co., LLC, with a target price of $120. Looking ahead, Tesla is set to disclose its third-quarter earnings for the fiscal year 2024 on October 16th, which is likely to attract further scrutiny from analysts and investors.

Meanwhile, Tesla is grappling with operational challenges in its Grünheide factory in Germany, where the employee absentee rate soared to 17% in August, significantly higher than the national average. CEO Elon Musk has noted these issues and is reportedly investigating the matter. The high absence rate has been attributed to employees' concerns over extreme workloads and safety hazards.

The escalating situation at the Grünheide plant has prompted many workers to join the German metalworkers' union, IG Metall, in response to the perceived overwhelming pressures and risk-prone conditions. This labor unrest has come at a time when Tesla faces declining demand in the European automotive market, as evidenced by a 16% drop in vehicle registrations in the region over the first eight months of the year.

Despite these challenges, Tesla continues to push for advancements in technology and operations. The company's ongoing efforts to innovate in the electric vehicle space are expected to lead to improvements in battery technology, potentially reducing costs in the future. While current adversities pose significant hurdles, Tesla's adaptability and resilience may eventually guide the company toward a more stable future.

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