Tesla falls on SAP snub report, Piper Sandler price target cut

Tesla shares came under pressure on Monday after a report that Germany’s SAP was no longer planning to buy electric cars from the U.S. automaker and on Piper Sandler’s price target cut on the stock, citing lower delivery expectations this year.

Shares of the Elon Musk-led company fell 4 percent to $180.46 in late afternoon trading, hitting their lowest since May 2023. If losses hold, the world’s most valuable automaker could lose nearly $24 billion in market capitalization.

That adds to $193 billion the stock has lost up to Friday’s close after the company last month forecast “notably lower” growth for deliveries in 2024, compared with a 21-percent rise last year.

READ: Tesla erases $80B in valuation after Musk’s sales warning

German publication Handelsblatt reported earlier in the day that SAP will no longer source company cars from Tesla due to delays in deliveries and price fluctuations.

Less affordable to consumers

Separately, Piper Sandler said it was expecting deliveries of 1.93 million vehicles this year, representing a growth rate of about 7 percent, well below the long-term annual target of 50 percent that Musk set about three years ago.

CEO Elon Musk said in January that high interest rates had increased monthly payments for Tesla’s cars, making them less affordable for consumers.

READ: Musk: Chinese EV firms will ‘demolish’ rivals without trade barriers

U.S. safety regulators on Friday upgraded their probe into Tesla vehicles over power steering loss to the status of an engineering analysis – a required step before the agency could demand a recall.

Meanwhile, Elon Musk’s use of illegal drugs was known to several current and former Tesla and SpaceX Board members, the Wall Street Journal reported on Saturday.

Despite the rout, Tesla’s stock trades at 57.75 times its 12-month forward earnings estimates, compared with 24.10 for Meta Platforms and 40.97 for Amazon.com, the EV maker’s peers among the Magnificent Seven stocks.