Rocky ride: Tesla stock on pace for its worst year ever

LOS ANGELES — Owning Tesla stock this year has been anything but a smooth ride for investors.

Shares in the electric vehicle maker are down nearly 70% since the start of the year, on pace to finish in the bottom five biggest decliners among S&P 500 stocks.

By comparison, the benchmark index is down about 20%.

While Tesla has continued to grow its profits, signs of softening demand and heightened competition have investors increasingly worried.

And then there’s CEO Elon Musk’s acquisition of Twitter.

Some of Musk’s actions since taking over the social media company, including doing away with a content moderation structure created to address hate speech and other problems on the platform, have unnerved Twitter’s advertisers and turned off some users.

That’s stoked concerns on Wall Street that Twitter is taking too much of the billionaire’s attention, and possibly offending loyal Tesla customers.

Musk’s acquisition of Twitter opened up a political firestorm and has caused Musk and Tesla’s brand to deteriorate, leading to a “complete debacle for the stock,” Wedbush analyst Dan Ives wrote this week.

Musk has said that he plans to remain as Twitter’s CEO until he can find someone willing to replace him.

Despite Musk’s focus on Twitter, Tesla’s results have been solid this year. The Austin, Texas, company posted year-over-year profit and revenue growth through the first three quarters of 2022, including more than doubling its third-quarter profit from a year earlier.

Still, electric vehicle models from other automakers are starting to chip away at Tesla’s dominance of the through 2020, Tesla had about 80% of the EV market. Its share dropped to 71% in 2021 and has continued to decline, according to data from S&P Global Mobility.