“Bloomberg” reported on Friday (21st) that Tesla has lowered the price of its cars in the United States six times in a row this year, and the U.S. auto industry generally has poor financial reports. Analysts believe that this is an ominous omen for the economy.
Tesla has cut the price of its cars in the U.S. six times so far this year. Its latest earnings report showed lower profits. U.S. auto loan giant Ally Financial (ALLY-US) first-quarter profit was under pressure as the company made fewer loans and set aside funds for defaults. Dealer Lithia Motors (LAD-US) and AutoNation (AN-US) also sold fewer new and used cars. At the same time, the delinquency rate of car loans is also rising.
Matthew Tuttle, CEO of Tuttle Capital Management, said: “For consumers, changes in auto demand and pricing are like canaries in the coal mine, and this is a sobering lesson for investors in general, compared with auto stocks. , large technology stocks are considered relatively safe investments by fund managers.”
Tesla (TSLA-US) adjusted the price of high-end cars in the United States after the market on Thursday, raising the prices of Model S and Model X by 2% to 3%, prompting Tesla to close up 1.28% to $165.08 per share on Friday, but the share capital The week still plunged 11.40%.
New Street Research analyst Pierre Ferragu, who is long-term bullish on Tesla, released a report pointing out that Tesla’s weak performance is related to the overall economy.
Ferragu mentioned: “The economic recession has already begun, and although the demand for Tesla vehicles is still higher than the supply, the price is a series of price cuts. Profits will fall further in the second quarter and recover slowly in the second half of the year.”
Ferragu sees a sharp drop in demand for cars in China and signs of weakness in the global economy.
The COVID-19 pandemic has caused sharp fluctuations in demand for cars. After the outbreak, car prices rose sharply due to severe supply constraints. Even as auto factories gradually reopen, the companies face severe supply chain delays and shortages, driving up vehicle prices and fueling inflation in the broader economy.
The outlook for the auto industry is darkening as the Federal Reserve raises interest rates, making already expensive auto loans more expensive and starting to weigh on demand.
Will Rhind, CEO of GraniteShares, warned: “The bigger problem is that over the past few years, people have been paying very high costs for car loans, and because of the lack of inventory, these loans have also been overpriced. This is similar to the situation in the housing market.”
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