Tesla stock under pressure from Red Sea delays, rising labor costs, price cuts
An employee of the Tesla Gigafactory Berlin Brandenburg works on a production line of a Model Y electric vehicle.
Patrick Pleul | Picture Alliance | Getty Images
Shares of Tesla dipped as much as 3% Friday morning as the stock faced pressure from supply chain delays due to a crisis on the Red Sea, and after offering more price cuts on its vehicles in China. In the U.S., rising labor costs and a decision by rental car company Hertz to sell off a large portion of its electric vehicle fleet, also added to Tesla’s woes.
Shares had recovered a bit by 10 a.m. ET, when the stock was down about 1.5%.
Reuters reported late Thursday that Tesla plans to suspend most production at its factory outside Berlin in Grunheide, Germany from around Jan. 29 to Feb. 11 due to conflict in the Red Sea that has disrupted global trade.
The Iranian-backed Houthi militia group has been attacking cargo ships and merchant vessels in the Red Sea in response to the ongoing war in the Gaza Strip. These attacks have drawn condemnation from leaders around the globe.
“The considerably longer transportation times are creating a gap in supply chains,” Tesla told Reuters in a statement.
Analysts at Baird estimate Tesla produces between 5,000 and 7,000 vehicles per week at its German vehicle assembly plant, which would imply “a 10k-14K hit” to deliveries in its first quarter, according to a Thursday note.
The Baird analysts wrote that they are “wary” of further impacts to Tesla’s supply chain, and they are “closely monitoring” any impact on the company’s shipping routes from China. “No delays have been cited, however, we speculate that disruptions in the Red Sea may lead to longer wait times as supply chains are rerouted,” they wrote.
Analysts were also focused on Tesla’s continuing price cuts including new discounts in China. Morgan Stanley analysts noted Model 3 and Model Y vehicles have been freshly discounted, though the cuts were “more moderate than the market had expected,” according to a note Friday.
Price cuts over the past year have impacted Tesla’s ability to keep selling its fully electric vehicles in high volumes to rental car companies including Sixt and Hertz.
Hertz CEO Stephen Scherr said on CNBC’s Squawk on the Street on Thursday that his company is taking 20,000 EVs out of its fleet, which was comprised mostly of Tesla vehicles.
Hertz is trying to “bring supply in line with demand” Scheer said, and “addressing a cost issue related to the EVs in the context of damage and damage costs” as well as depreciation in the value of the electric vehicles.
Meanwhile, Tesla’s business and reputation remains under pressure in Europe due to ongoing labor strikes in Sweden and throughout Scandinavia.
At its factories in the U.S., the EV maker is implementing pay rate increases for workers that kick in this month, a move seen as a tactic to stave off workers’ wishes to unionize. The pay bumps follow historic wins by the United Auto Workers in 2023 with Tesla competitors in Detroit, and an announcement by UAW that it would aim to organize beyond the Big Three including at Tesla, Toyota and others.
Cheng Xin | Getty Images
Airbnb reported second-quarter results on Wednesday that beat analysts’ expectations.
Here’s how the company did based on average analysts’ estimates compiled by LSEG:
- Earnings per share: $1.03 vs. 93 cents expected
- Revenue: $3.10 billion vs. $3.04 billion expected
Revenue increased 13% from $2.75 billion during the same period last year. The company reported net income of $642 million, or $1.03 per share, up from $555 million, or 86 cents per share, a year earlier.
In the third quarter, Airbnb expects to report revenue of $4.02 billion to $4.10 billion, or $4.06 billion in the middle of the range. Analysts were expecting $4.05 billion for the period, according to LSEG.
In a letter to shareholders, the company said it had a strong second quarter, even against a volatile macroeconomic backdrop. U.S. President Donald Trump’s sweeping tariff and trade policies plunged markets into chaos for much of April.
“Despite global economic uncertainty early in the quarter, travel demand picked up, and nights booked on Airbnb accelerated from April to July,” the company said.
Airbnb reported 134.4 million nights and seats booked, up 7% from a year ago and above the 133.35 million expected by StreetAccount.
Gross booking value, which Airbnb uses to report host earnings, service fees, cleaning fees and taxes, totaled $23.5 billion in the second quarter. That figure is above the $22.66 billion expected by analysts polled by StreetAccount.
Airbnb said it received authorization for new share repurchase program of up to an additional $6 billion of Class A common stock. The company said it repurchased $1 billion of Class A common stock during the second quarter, and previously had authorization to purchase $1.5 billion more as of June 30.
Airbnb shares were down slightly in extended trading. They’ve slipped 0.7% for the year as of Wednesday’s close, while the Nasdaq is up almost 10%.
Airbnb will hold its quarterly call with investors at 4:30 p.m. ET.
Doordash food delivery service in New York City on Feb. 13, 2025.
Danielle DeVries | CNBC
DoorDash shares climbed about 5% in extended trading on Wednesday after the food delivery company reported better-than-expected earnings and revenue for the second quarter.
Here’s how the company did compared to analyst estimates based on LSEG’s consensus:
- Earnings per share: 65 cents vs. 44 cents expected
- Revenue: $3.28 billion vs. $3.16 billion expected
Revenue jumped 25% from $2.63 billion a year earlier, DoorDash said in a press release. The company reported net income of $285 million, or 65 cents a share, after recording a loss of $157 million, or 38 cents per share, in the same period a year ago.
Orders increased 20% from a year earlier to 761 million. Gross order value (GOV) rose 23% to $24.2 billion.
DoorDash shares have soared 54% this year as of Wednesday’s close, lifting the company’s market cap to $109 billion. The Nasdaq is up almost 10% in 2025.
Doordash one day stock chart.
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