Photo/Zhang Jian (NBD)

Tesla's stock price plummets 4.54% on Thursday, closing at $169.48 per share. The company's market capitalization evaporates by $25.7 billion overnight, or about 184.7 billion yuan, to $539.76 billion.

Wells Fargo lowers its target price for Tesla from $200 to $120, one of the lowest target prices on Wall Street for the company, implying a further 30% downside.

Tesla CEO Elon Musk warned in January that the company's sales growth would slow significantly this year. Investors have been concerned about Tesla's growth prospects since then.

On January 25, Tesla released its 2023 financial report, showing that the company's total revenue for the year reached $96.773 billion, a year-on-year increase of 18.79%; net income attributable to common shareholders was $14.997 billion, a year-on-year increase of 19%; and non-GAAP net income attributable to common shareholders was $10.882 billion, a year-on-year decrease of 23%. This was Tesla's first annual profit decline since 2017.

Goldman Sachs analysts believe that the main headwinds facing Tesla include larger-than-expected price cuts for its cars, increased competition in the electric vehicle market, and delays in products and features such as FSD and the third-generation platform. Therefore, while the company has long-term growth potential, it faces significant risks in the short term.

Morgan Stanley also said that the imbalance between supply and demand for electric vehicles could put pressure on Tesla this year. "Electric vehicle demand is bound to slow down in the next year. Tesla will have to choose between continuing to cut car prices to stay competitive or keeping prices stable in 2024," said an analyst at Wedbush, a well-known investment bank in the United States.