Tesla’s 2024 has kicked off with a bumpy start. In less than two months, the EV-giant has had to issue recalls for millions cars, halted production at a factory, and was dealt a major legal blow.
These roadblocks have resulted in the company’s stock price falling 25% since the start year. As of Friday morning, shares of Tesla are down to about $185 from $282 on Jan. 2.
Here’s a timeline of Tesla’s woes so far in 2024 and how they’ve impacted its market cap.
Five days into the new year, Tesla issued a recall for 1.6 million cars in China. The country’s State Administration for Market Regulation prompted the recall over issues with Tesla’s Autopilot driver-assistance system. The regulator said “misuse” of the feature could increase the risk of car crashes.
To address the recall Tesla will update the vehicles’ software to add additional controls and alerts to encourage drivers to use the feature responsibly, according to the regulator.
Less than a week later, Tesla announced on Jan. 12 that it would be temporarily halting production at its factory near Berlin due to disruptions in its supply chain.
“The armed conflicts in the Red Sea and the associated shifts in transport routes between Europe and Asia via the Cape of Good Hope are also affecting production in Grünheide,” Tesla said in a statement.
The pause at the factory, which manufactures Model Y vehicles and batteries, is set to last from Jan. 29 to Feb. 11.
At the end of the month, the company faced a major legal blow when a Delaware state judge overturned the company’s $56 billion executive compensation package for its CEO Elon Musk.
Delaware Chancery Court Judge Kathaleen McCormick ruled that the “process leading to the approval of Musk’s compensation plan was deeply flawed” and was unfair to shareholders.
The 2018 package, the largest in history, awarded Musk’s 20.3 million stock options over 12 tranches and was valued at up to $55.8 billion at the time. It helped make him the richest person in the world.
In response to the ruling, Musk said that shareholders will vote to reincorporate the company in Texas.
Tesla’s most recent setback is a recall for nearly 2.2 million vehicles in the US. The National Highway Traffic Safety Administration said that the vehicles’ brake, park, and antilock brake warning lights were too small and that the issue would be fixed via a software update.
This recall follows an earlier one in the US from December over the issues with Tesla’s Autopilot feature and suggests increased scrutiny from the NHTSA.
Investors have not responded well to these events. Since the beginning of the year, Tesla has taken a significant hit to its market cap.
Said market cap has dropped $153 billion (25%) to in just four weeks $601 billion from over $754 billion in Jan. 05. Elon Musk will have to watch his back if he wants to retain his title as the world’s richest person.