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- Tesla is laying off 3,000 workers, the company said Friday morning.
- Shares fell 7% after the announcement as investors wondered what the restructuring meant for the stock.
- Morgan Stanley said the decision could indicate that Tesla's market share could peak, while other badysts said investors had "more questions than answers".
The news of Tesla dismissing 3,000 workers on Friday added to investor concerns that demand could decline for its Model 3 sedan.
In an email to employees, general manager Elon Musk said the layoffs were part of an initiative to reduce the production cost of the sedan, which was complicated only by reducing half of the US federal tax credit previously reserved to buyers.
Adam Jonas, an badyst at Morgan Stanley, said these factors, including Musks' announcement that the Teslas client sponsorship program is ending Feb. 1, could indicate that the company is approaching a peak.
"In 2019, we expect Teslas' share of the US electric vehicle market to increase before competition begins to shrink gradually," he said in a note to customers on Friday morning. "The Teslas gap versus the competition in terms of market share may be approaching a peak."
Indeed, as Tesla launches the production of its long-awaited Model 3 base model, an increasing number of electric vehicles are expected to arrive on the market soon. In Detroit last week, Cadillac revealed a new electric concept vehicle, the Chinese manufacturer Geely has announced a new electric model that will be sold in the United States and Nissan has unveiled an all-wheel drive and fully autonomous electric concept.
Even Ford has announced an all-electric F Series truck. At the same time, Nissan Leaf's sales increased by 95% last year.
Read more: Elon Musk Takes Oldest Executive Journal Ploy By Firing 3000 Tesla Workers
True, Tesla accounted for 80% of electric vehicle sales in the United States last year, according to Inside EV data, and this market continues to grow rapidly. So until Tesla reports its fourth quarter results, investors will have more questions than answers.
That's what lies behind the 7% fall in stocks on Friday morning, according to another badyst.
"The instinctive reaction of this morning article will be clearly negative from the Streets point of view because there will be more questions than answers until the company officially announces its results / advice in early February," he said. said Dan Ives, an badyst at Wedbush. He is much more upbeat about the company than Jonah, with a price target of $ 440 over Morgan Stanley, $ 291.
"While headwinds abound on many fronts," continues Ives. "We continue to believe that Tesla will be able to bring out a stronger, more profitable and more diversified EV (geographically and in terms of price) over the next 12 to 18 months, which will help lay the foundation for model 3 beyond. "
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SEE ALSO: Nearly half of the 3 models registered in the United States during the first 10 months of 2018 came from California, but experts say it will not hurt Tesla's future.
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