Tesla (TSLA) shares fall after Musk’s EV maker warns of 2024 slowdown

Tesla and SpaceX’s CEO Elon Musk reacts during an in-conversation event with British Prime Minister Rishi Sunak in London on Nov. 2, 2023.

Kirsty Wigglesworth | Reuters

Tesla shares closed down 12% Thursday, their biggest drop in over a year, a day after the company reported earnings that missed expectations and warned of a slowdown in 2024.

For most of the day, the stock was headed for its steepest decline since 2020, but narrowly averted that distinction at the close.

Tesla reported revenue and earnings on Wednesday that missed market expectations. Tesla’s automotive revenue, a closely watched metric, totaled $21.6 billion in the fourth quarter of 2023, rising just 1% year-on-year.

But the biggest concern was Tesla’s outlook. The electric carmaker said vehicle volume growth in 2024 “may be notably lower” than the rate observed last year, as the company works toward launching its “next-generation vehicle” in Texas. The company cautioned investors that it’s “currently between two major growth waves.”

Investors betting against the stock are having a lucrative day. Short sellers made more than $2 billion on Tesla since Wednesday’s close, according to the financial analytics firm Ortex Media. The stock is now down 27% for the year after more than doubling in 2023.

Tesla delivered 1.8 million cars last year. The company has been cutting prices around the world in key markets across Europe and China, as it faces rising competition from Chinese players like BYD and traditional automakers. The price cuts have weighed on Tesla’s margin.

Adding pressure on Tesla’s stock, various brokers reduced their price target for the company, with Barclays cutting its price target from $250 to $225.

“Not as bad as feared, but a cloudy path ahead reinforces some downside risk for now,” Barcalys analysts wrote in a note on Thursday.

RBC analysts lowered their price target from $300 to $297. Canaccord Genuity said in a note on Wednesday that it has also taken down its price target to $234 from $267.

— CNBC’s Lora Kolodny contributed to this report.

Correction: A previous version of this story incorrectly stated that Tesla closed on its worst day since 2020. They narrowly missed that mark.

WATCH: Wall Street expectations for Tesla this year are far too high

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