The U.S. electric vehicle (EV) maker Tesla (NASDAQ:TSLA) cannot seem to avoid bad news in 2024. Investors were already taken aback when CEO Elon Musk announced at the beginning of the year that 2024 would be a difficult year for growth and issued lackluster guidance. This premonition turned out to be true, as Tesla saw deliveries decline for the first time since 2020 in the first quarter of 2024, despite Tesla’s Chinese rivals and the American luxury EV maker Rivian (NASDAQ:RIVN) reporting increased deliveries and production.

Recent financial figures point to a souring outlook for Tesla, and any changes to interest rates would not be minimal and wouldn’t significantly impact Tesla’s guidance for the year. Below are three reasons to sell your Tesla stock.

Tesla’s Recent KPIs Are Lackluster

Tesla has had a mixed bag of earnings results in fiscal year 2024. I have already discussed ad nauseam about the way in which America’s top EV maker dropped the ball on the first quarter earnings results while competitors delivered comparatively stellar results. Tesla’s second-quarter results, unfortunately, underscored how the EV maker has continued to struggle to boost margins and deliveries in a way that’s pleasing to investors. Total revenue increased a tepid 2% year-over-year (YOY), clocking in at $24.9 billion, generally above Wall Street’s estimates. However, despite a significant jump in regulatory credits, which are carbon credits that Tesla has amassed over the years and has sold to other automakers, Tesla’s automotive revenue declined 7% YOY to $19.9 billion for the quarter.

To recap, Tesla’s deliveries for the quarter, which the company released a couple of weeks before its earnings print, also came in line with Wall Street’s expectations at 443,956 vehicles, albeit declining nearly 5% on a YOY basis. These latest figures point to the fact the EV maker is still struggling to sell new vehicles in this tough macroeconomic environment.

And that is despite all the discounts, which have put pressure on Tesla’s net income. EPS for the quarter came in below Wall Street’s estimates.

The EV Maker Is Backing Away From New EV Factories

There has been a lot of talk about the EV boom coming out of China in recent quarters. Companies like BYD (OTCMKTS:BYDDY) have grown deliveries and sales in the high double digits, which trounce Tesla’s YOY declines. These companies are eating up market share in China and are also setting their sights on other markets. Europe, Latin America (LATAM) and Southeast Asia (SEA) will likely be their new battleground, and it’s not clear Tesla is ready for this.

Tesla recently scrapped plans for EV factories in Thailand, Malaysia and Indonesia — all of which are fertile markets where China’s EV presence is growing. Instead, Tesla has chosen to focus on developing charging infrastructure in its core SEA markets. However, Tesla has not scrapped new factories in Germany, China or Europe, which points to a broad strategic focus on these markets.

This strategic shift also highlights another important development. Tesla can’t really focus on LATAM and SEA markets because its vehicles cost way more than their Chinese peers. Without a refresh in Tesla’s current lineup that would attract budget-conscious customers, it will probably be difficult for the EV maker to successfully enter these new, burgeoning EV markets.

Despite All the Price Volatility, TSLA Is Still Expensive

Now, let’s review where Tesla’s share price and valuation are sitting. For those watching the market, since early August, large tech stocks have suffered a major blow to their valuations as U.S. economic data and concerns over AI “hype” spurred a broad tech selloff. Tesla’s share price has fallen about 21% for the year and almost 20% over the past 30 days. Despite the broader market jitters and Wall Street being unhappy with Tesla’s overall financial and operational performance this year, Elon Musk’s EV giant still trades at 70.85x forward earnings.

BYD, Tesla’s largest EV competitor globally, trades at a fraction of the American EV maker’s valuation: just at 14.88x forward earnings. China is going through its economic problems, which has sparked a general selloff in Chinese stocks. However, BYD’s fundamentals and growth outlook remain largely intact, especially as it focuses on quality EV cars that vary in price range and ultimately attract a variety of car buyers. Would-be Tesla investors should keep this in mind before dumping more money into Tesla stock.

On the date of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.