Billionaire Elon Musk has called on his employees not to be distracted by the current market "craziness", assuring them that Tesla will one day become the world's most valuable company.

Softening demand for electric vehicles has hurt the value of Tesla's shares owned by the company's employees.
Softening demand for electric vehicles has hurt the value of Tesla's shares owned by the company's employees. (AP Archive)

Tesla Inc Chief Executive Elon Musk has told employees that they should not be "bothered by stock market craziness" after the company's shares fell nearly 70 percent this year on jitters over softening demand for electric vehicles and Musk's distraction with running Twitter.

In an email sent to staff on Wednesday and reviewed by Reuters news agency, Musk said he believes that long term, Tesla will be the most valuable company on earth.

"Btw, don't be too bothered by stock market craziness. As we demonstrate continued excellent performance, the market will recognise that," Musk said.

"Long-term, I believe very much that Tesla will be the most valuable company on Earth!"

He also urged employees to ramp up deliveries at the end of this quarter, after the automaker offered discounts on its vehicles in the United States and China.

"Please go all out for the next few days and volunteer to help deliver if at all possible. It will make a real difference!" he said in the email.

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Record fall

Tesla is set to round off 2022 with a 68 percent drop – the most among the big US technology firms – as fears mount over slowing demand in China and top boss Elon Musk's growing distractions with Twitter.

About 2.85 percent of Tesla shares, or $8.36 billion, are shorted, according to financial analytics firm S3 Partners, adding that short selling was up by more than 8.98 million shares this year due to a drop in the stock price, which was partly driven by Musk's share sales to fund his Twitter purchase.

Analysts expect Tesla to deliver 442,452 vehicles in the fourth quarter, according to Refinitiv data.

Tesla's plummeting share price has hurt the value of shares owned by the electric vehicle (EV) maker's employees. Tesla has offered stock compensation for most employees including factory workers.

The company's shares rebounded on Wednesday, following an 11 percent slump in the previous session on a Reuters report that the automaker planned to run a reduced production schedule in January at its Shanghai plant. The news sparked worries of a drop in demand in the world's biggest car market.

Morgan Stanley analysts cut their price target on the stock to $250 from $330, saying the last two years of demand exceeding supply will be "substantially inverted to supply exceeding demand" in 2023.

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Source: Reuters