Throughout the pandemic, Tesla was all over the news for being a high-performing electric vehicle company. It continued producing the largest number of electric vehicles quarter after quarter.
Despite the shortage of semi-conductors, Tesla continued performing really well. Just when it was thought that Tesla would continue delivering the same performance in 2022 as it did in 2021, things have taken a negative turn.
Tesla’s Performance Since the beginning of 2022
Right from the beginning of the year 2022, Tesla has been performing badly. Its stock prices from the beginning of the year until now have experienced a substantial dip in the stock market.
Tesla’s stocks have been moving downhill since the start of the year, costing it billions of dollars in the process. Several reasons have resulted in Tesla losing so much in almost 7 months and the downfall still continues.
Factors such as COVID lockdowns, supply chain problems, and new plants are now taking a toll on the electric vehicle manufacturing giant.
Despite the downtrend, many thought that Tesla was plagued by the same reasons as other tech companies. However, things have taken a worse turn for Tesla after the latest statement made by its CEO.
Elon Musk Hints at a Possibility
Elon Musk, the CEO of Tesla, has pointed out that Tesla has been facing losses almost every month. If the situation doesn’t get better for Tesla, then he’s afraid that he’ll have to resort to filing bankruptcy for the company.
He stated that in the past couple of years, the interruptions faced in the supply chain have been nothing less than a nightmare for the entire world. However, their company is facing the problem on a much larger scale.
He pointed out that compared to other car manufacturers, they need more semiconductors per vehicle as they are all-electric. Therefore, they are taking a huge hit due to supply chain shortages. He added that still, the semiconductor situation hasn’t fully recovered and they are facing huge losses because of it.
They are not able to run the plants that they had recently opened to their full potential. The labor and other costs they are incurring are also taking a huge toll on their capital.
Circumstances May Lead to Bankruptcy
Elon Musk stated that their prime goal is to ensure that the company gets back to its old level. They want the supply chain issues to be fixed at the earliest so they can put their labor to work and start clearing out their debts.
If the company doesn’t operate all of its plants given the fact they are able to fulfill the demands of the customers, it may have to file for bankruptcy.
Musk added that out of all the manufacturing plants they opened, the plants in Texas and Germany are costing them the most. The losses they are bearing because of the supply chain issues on these plants are in billions of dollars.
Following the interview, the share prices for Tesla went down by 1.73%.