Tesla’s stock market value dipped below Facebook’s parent Meta Platform for the first time in more than a year. The slide came as shares of tech giant came under pressure, dropping 7.7% amid growing concerns about weakening electric vehicles demand. A 7.7% drop pushed the stock near the $ 100-a-share barrier as a selloff that began last year continues to gather momentum.

Tesla Stock SellOff

While the broader tech industry has been under pressure amid rising interest rates and recession concerns, Tesla’s stock implosion has stood out. The stock shed more than 60% in market value last year. In contrast, the NASDAQ index was down by about 33%.

Last year it finished at the very bottom of the NYSE FANG Index, a gauge that measures the strength of the biggest tech companies. It has fallen from grace barely a year after being the heavyweight in the index. Its market value has already dropped below the $400 billion level after reaching highs of $1 trillion at the start of last year.

The selloff has come amid the growing debate that Tesla is like any other automaker and thus does not deserve the high valuation it has enjoyed over the years. Additionally, the preoccupation of chief executive officer Elon Musk with the acquisition and management of Twitter has negatively impacted the stock.

However, it is the growing concerns about demand for electric cars amid the face of a recession that appears to be taking a toll on Tesla stock in the market. Tesla stock fell by more than 12% on the first day of trading in 2023 after delivering fewer than-expected vehicles last quarter despite offering significant incentives to fuel sales.

While the company sells self-driving electric cars, the premium price tag has always aroused concerns. Weaker than expected deliveries  for the fourth quarter  signals the company is struggling to sell as many cars as it used to in the past.

Tesla Woes

A move by the automaker to initiate another round of prices cuts for its vehicles also indicates waning demand for Tesla cars. The worries have all but intensified fears in the investment community fuelling aggressive selloffs in the market. Moreover, China’s price cuts could signal that the automaker is under immense pressure from other automakers also working and selling electric cars.

Tesla stock is following in Meta Platform’s footstep which has also shed a significant amount of market value in recent years amid growing skepticism about its core business. In addition, missteps by the CEOs of the two companies have rattled the markets.

Nevertheless, Meta Platforms has shown signs of bottoming out in recent months. The stock is up by more than 40% from its November lows. The bounce back has come on the company embarking on a drastic restructuring drive. The drive has involved cost-cutting measures such as laying-off staff and abandoning ambitious projects.

It remains to be seen if Tesla will also embark on a restructuring drive to try and salvage the situation as it remains under pressure. Everything should be clear when the company reports its fourth-quarter results at the end of the month.