In a dramatic series of events affecting Tesla, the electric vehicle giant has recently witnessed a staggering loss in market value, amounting to nearly 500 billion yuan—about 70 billion dollars—within just two trading days. This decline has raised eyebrows among investors and analysts alike, particularly in light of the recent decision by Morgan Stanley, a prominent investment bank, to downgrade Tesla's target price from 345 dollars to 320 dollars. Compounding the pessimism, the bank warned that in the worst-case scenario, the company’s shares could fall to a mere 100 dollars. Just a month earlier, another significant player in the financial sector, Daiwa Securities, had also cut its target price for Tesla from 245 dollars to 195 dollars.

Prominent Tesla investor Ross Gerber of Gerber Kawasaki Wealth & Investment Management has attributed the company’s stock decline to CEO Elon Musk’s failure to complete critical projects. Gerber expressed concerns about the intense competition Tesla faces in international markets, which he believes remains a central challenge for the company. It’s not merely a matter of market strategy; this situation encapsulates a broader narrative of innovation and operational challenges that Tesla needs to address urgently.

Simultaneously, Tesla’s manufacturing facility in Germany has experienced production halts due to power outages, with no clear indication of when operations might resume. This incident is projected to result in losses amounting to hundreds of millions of euros for the company. Musk took to social media to criticize the notion of pausing electric vehicle production while still relying on fossil fuel vehicles, labeling such a practice as “extremely foolish.”

Regarding Morgan Stanley's downgrade, analyst Adam Jonas provided an overview of several factors currently burdening Tesla. These include a decline in electric vehicle demand, an aging product lineup compared to contemporaries, fierce competition in the Chinese market, and a shifting consumer preference in the U.S. towards hybrid vehicles instead of fully electric models. In his analysis, he downgraded the target price whilst maintaining a rating of "overweight," which suggests that while he remains cautiously optimistic, there are clear warning signs ahead.

Jonas revised his sales estimates for Tesla for the fiscal year 2024 to below 2 million units, indicating a year-over-year growth rate of just over 10 percent. Previously, he had forecasted a gross margin of 13.2 percent for Tesla’s automotive division, which he has now marked down to 11.4 percent. He emphasized that for Tesla to be recognized as an artificial intelligence company, it must first stabilize its profitability in the automotive sector. He anticipates that this process could extend over several quarters, during which a conservative estimate of 100 dollars per share may be realistic in a bearish scenario.

The day prior to the Morgan Stanley report, Tesla shares plummeted by 7 percent due to alarming sales data emerging from the Chinese market. Following the release of the report, the stock fell an additional 3.93 percent, closing at 180.74 dollars per share, which translated to a market capitalization collapse to 575.6 billion dollars. In just two days, Tesla's valuation shrank significantly, signaling that investor confidence may be waning.

Earlier this year, Daiwa Securities had substantially downgraded Tesla’s target price, attributing their decision to corporate governance concerns and anticipating a tough financial year for the company in 2024. The trends in the market have compelled analysts to rethink their strategies regarding electric vehicle sales, particularly in light of slowing growth and falling free cash flow—an alarming indicator for a company that has championed itself as a pioneer in green technology.

Among the criticisms levied at Musk is the assertion that his ambitious projects, particularly regarding full self-driving capabilities, remain unrealized, affecting the company’s overall valuation. Despite Musk’s threats to withdraw AI projects from Tesla unless he retained 25 percent ownership, Gerber dismissed such notions as fanciful. He stressed that this branding leverages considerable premium for Tesla, and with many projects left incomplete, it suggests the company is returning to a more rational valuation level—something that many financial experts believe is long overdue.

Additionally, the competitive landscape has intensified, notably in the Chinese market, where Tesla has struggled against rivals like BYD. Last month, Tesla sold just 60,365 vehicles in China, marking its lowest monthly sales figures since December 2022—a troubling trend for a company that once dominated the market. Gerber warned that escalating overseas competition detracts Tesla's focus from other critical projects, emphasizing the urgent need for the company to streamline its operations and enhance its offerings.

In the midst of this tumultuous backdrop, an interesting political narrative unfolded when former U.S. President Donald Trump was reportedly spotted meeting with Elon Musk and some affluent contributors supportive of the Republican Party in Palm Beach, Florida. This meeting could signify potential alliances emerging between the tech industry and political figures, as Trump actively seeks to bolster his fundraising efforts by courting influential billionaires like Musk—an individual who has become a symbol of innovation and controversy in contemporary America.

Trump's team has not yet provided comments on these reports. However, as speculation mounts regarding future political dynamics in the U.S., the interest of high-profile individuals in the tech sector suggests that significant financial resources could become a focal point of forthcoming electoral campaigns. With current polling indicating a strong performance from Trump against Democratic contenders in the run-up to the elections, this crossroad between technology and politics represents a compelling shift in the socio-economic landscape.

In summary, the confluence of supply chain disruptions, shifting consumer preferences, heightened competition, and external economic pressures has sparked a multifaceted crisis for Tesla. The company must navigate through turbulent waters and adapt its strategy to reinforce its market position while dealing with significant investor scrutiny. As the story unfolds, both the fate of Thunderbolt and the implications for the broader electric vehicle market will undoubtedly capture the attention of stakeholders and consumers alike as they seek answers to pressing questions about sustainability, innovation, and the future of transportation.