This week's case is about Tesla, which is facing challenges on several fronts. On Tuesday 13th February the equity markets were negatively affected by the higher-than-expected US CPI figures for January.

Last week, Tesla released its Q4 and full-year 2023 financial results, which largely disappointed investors. Tesla faces a gradual erosion of its competitive advantage vis-à-vis Chinese manufacturers, who can rapidly scale up their EV production aided by subsidies provided by the Chinese government. Also, since the onset of 2024, federal tax credits for Tesla's Model 3 Rear-Wheel Drive and Model 3 Long Range have been halved in the United States.

Higher-than-expected inflation in the US, with core CPI coming in at 3.9% in January 2024 versus estimates of 3.7% on Tuesday 13th February, pushed the US 2-year Treasury yield up by around 13 bps from 4.41% to 4.54%. This put selling pressure on the S&P 500.

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