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- Tesla's value has fallen nearly $200 billion in just over a month.
- The EV-maker's shares have fallen about a fifth since their 2023 peak last month.
- "Exploding" Tesla inventories could spell more trouble for Elon Musk's carmaker.
The only way for Tesla stock has been up this year – until last month at least.
Elon Musk's EV-maker had surged about 170% to peak at $291 on July 19, but has since lost about a fifth of its value.
That's dragged Tesla's market cap down almost $200 billion to about $730 billion as of Tuesday's close, per Google Finance.
A mix of inflation, higher interest rates, and recession fears have driven Tesla's decline. Investors are bracing for Federal Reserve chair Jerome Powell's speech Friday for clues about its next steps.
The Fed has already raised elevated borrowing costs from near-zero to more than 5% over the past year. Some fear that any more rises could trigger a recession, given inflation is not too far above the Fed's 2% target at 3.2% annually.
Higher interest rates tend to be bad news for high-growth stocks, including Tesla, because it eats away at company profitably through expensive borrowing costs. Investors also get deterred from piling into equities as rising interest rates tend to push up returns on bond investments, making them a safer investment compared to stocks.
But Tesla's woes could also be coming from within the company itself. Gordon Johnson, founder and CEO of GLJ, pointed out said in a post on X that Tesla's inventories were "exploding."
—Gordon Johnson (@GordonJohnson19) August 16, 2023