what happened
Shares of Tesla (NASDAQ: TSLA) was hit hard on Wednesday. The share fell by 4.8% with the close of the market.
The stock is likely to be lower due to a decline in the overall market which weighed particularly heavily on growth stocks such as Tesla. However, shares may also be down due to a note of Morgan Stanley analyst Adam Jonas about Ford‘s new electric Mustang Mach-E taking market share from Tesla in February.
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Approximately
Jonas estimates that Tesla’s market share of the EV market in the US fell from 81% in February 2020 to 69% in February 2021, mainly due to the gain in the market share of the new Mustang Mach-E.
That still does not mean that Tesla’s sales of electric vehicles are doing badly; the total EV market grew by 40% year-on-year during the period, Jonas estimates.
However, the main reason for the decline in the stock is likely to be a setback in the overall market on Wednesday. The S&P 500 and Nasdaq Compound decreased by 1.3% and 2.7% respectively. Many growth stocks like Tesla have fallen even more.
Now what
The decline in Tesla stock has contributed to an overall downward trend for the stock in recent weeks. After rising to an everyday high of $ 900.40 earlier this year, the stock is now 7% lower than the previous year, which is less than the 2% decline of the S&P 500.
Investors should expect more volatility from Tesla shares, as growth stocks are usually much more volatile than the overall market.
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