Tesla erases US$80 billion in valuation after Musk's sales warning

Tesla tumbled over 12 per cent on Thursday (Jan 25) after CEO Elon Musk warned sales growth would slow this year despite price cuts

Tesla tumbled over 12 per cent on Thursday (Jan 25) after CEO Elon Musk warned sales growth would slow this year despite price cuts that have already hurt margins at the world's most valuable automaker and fueled investor concerns about soft demand and Chinese competition.

Musk said on Wednesday that growth would be "notably lower" as Tesla focuses on a cheaper, next-generation electric vehicle to be made at its Texas factory in the second half of 2025, which is expected to spark the next boom in deliveries.

But he said ramping up production of the new model would be challenging because it would involve cutting-edge technologies.

Tesla's stock suffered its sharpest intraday percentage loss in more than a year, with US$80 billion in market value wiped out on Thursday. That pushed its market capitalization loss for the month to about US$210 billion.