What happened
Shares of Tesla (TSLA 2.97%) plunged 36.7% in December, according to data provided by S&P Global Market Intelligence.
The sharp plunge brought shares of the electric car manufacturer down by nearly 70% for 2022.
Tesla's market capitalization now stands at roughly $356 billion, a far cry from the $1.2 trillion it was valued at just a year ago.
Image source: Getty images.
So what
The company faced a barrage of bad news during the month that dented investors' confidence and caused them to reevaluate the electric vehicle company's growth projections. First off, Tesla announced that it will run a reduced production schedule at its Shanghai plant in January, with no specific reason given for the lower production. One reason could be a projected spike in COVID-19 infections as China eases its strict zero-COVID policy.
A California law will also take effect this month that bans Tesla from advertising its vehicles as "fully self-driving." This is because the company has yet to demonstrate that its vehicles can drive themselves autonomously without human intervention. As the "fully self-driving" function is packaged as an additional option for which Tesla charges its customers, the ban on this feature means the company cannot earn the extra sales from advertising it.
NASDAQ: TSLA
Key Data Points
It didn't help that Elon Musk's management of Twitter has also come under fire as the platform banned multiple journalists last month. The Tesla CEO's antics were deemed to be bad for business as the unexplained ban goes against free speech and could spark a backlash. The resulting departure of more Twitter users may further destabilize the platform and cause Musk to sell more shares of Tesla to bulk up Twitter's finances.
Now what
Tesla reported its latest vehicle delivery numbers for the fourth quarter and the whole of last year. The fourth quarter saw 439,000 vehicles produced with 405,000 delivered, bringing 2022's total deliveries to 1.31 million, up 40% year over year.
Despite the good numbers, investors had expected 50% year-over-year growth, and the reported numbers fell short of expectations. Tesla will be announcing its full-year earnings on Jan. 25, and investors will be closely scrutinizing the numbers for signs of a further slowdown for the electric car producer.
