Elon Musk’s Tesla faces a tumultuous market fall, with shares plummeting 29% in less than 10 weeks, hitting the lowest point since May. This spiral culminated in Tesla’s market value dwindling from nearly $800 billion to slightly above $550 billion – a staggering $234 billion plunge, surpassing the total worth of McDonald’s, Disney, and Cisco.
Surpassing Titans: Tesla’s Freefall Compared to Corporate Giants
The repercussions extend beyond the auto industry, eclipsing the market values of notable entities such as Netflix and Coca-Cola. The decline even overshadows American Express and Nike, doubling Starbucks’ value and tripling Chipotle, FedEx, and Palantir.
Elon Musk’s Fortune Sheds Billions: A $40 Billion Yearly Slump
In tandem with Tesla’s nosedive, Elon Musk’s personal wealth has eroded by nearly $40 billion in 2024, slipping below $190 billion. This shift in fortune shuffles the billionaire hierarchy, pushing Musk from the apex of Bloomberg’s rankings to a surprising third place, ceding ground to Bernard Arnault and Jeff Bezos.
Stocks Soar, then Plummet: Tesla’s Wild Rollercoaster Ride
While Tesla shares surged almost fivefold since the start of 2020, they’ve plummeted by 60% from their November 2021 peak at a colossal $1.2 trillion. The reasons behind this freefall include dwindling demand for electric vehicles, fierce competition in China, and Tesla’s compelled price cuts.
Hertz’s Electric Exodus: Concerns Over Demand and Repair Costs
Further compounding Tesla’s challenges, rental giant Hertz is divesting 20,000 electric cars from its U.S. fleet, citing concerns about demand and higher repair costs for electric vehicles. The move, representing a third of Hertz’s global electric fleet, aims to balance supply and demand for electric vehicles and reduce loss costs associated with them.
Hertz Pivots: Slowing Down Electrification Plans
Hertz’s caution in embracing electric vehicles becomes evident as the company alters its trajectory. Despite purchasing 100,000 vehicles from Tesla in 2021 and announcing plans for 65,000 electric cars from Polestar, Hertz announced a slowdown in electrification in October 2023. CEO Stephen Scherr cited exorbitant damage repair costs for electric vehicles, which are approximately twice as much as conventional internal combustion engine vehicles.
Electric Fleet Sell-off: Hertz Prioritizes Combustion Engine Autos
Hertz is redirecting its focus, aiming to balance its fleet and minimize losses associated with electric vehicles. The company currently sells over 700 electric cars through its used car website, predominantly featuring Tesla Model 3 and Model Y vehicles. This strategic move by Hertz highlights the ongoing challenges in the electric vehicle market and its impact on major players like Tesla.