© Reuters. Tesla (TSLA) sinks as SAP moves away from EV giant
Tesla’s (NASDAQ:) stock dropped nearly 6% on Monday following reports that German software firm SAP would stop buying electric cars from the company.
Tesla’s shares fell to $177.27, the lowest since May 2023, and has traded down 28% this year. The decline accelerated after Tesla projected “notably lower” delivery growth in 2024, compared to a 21% increase last year.
If the losses continue, Tesla, the world’s most valuable automaker, could lose around $34 billion in market value. The stock already lost about $193 billion this year by Friday’s close.
German publication Handelsblatt reported that SAP will not continue to purchase company cars from Tesla anymore due to delivery delays and price changes.
Despite setbacks, Tesla’s stock still trades at 57.75 times its 12-month earnings estimate, higher than peers Meta Platforms (NASDAQ:) and Amazon.com (NASDAQ:).
Analysts at Piper Sandler expect Tesla to deliver 1.93 million vehicle this year, a 7% growth rate, far below Elon Musk’s 50% annual target set three years ago. The firm also cut its 12-month price target on the electric automaker from to $225 (From $295), citing an aging product lineup that may require more price cuts.
Tesla’s attempts to refresh the Model 3 sedan faces challenges, with CEO Elon Musk expressing concerns about slow consumer demand due to high interest rates last year.
Shares of TSLA are down 4% in afternoon trading on Monday.
