Shares of Tesla Inc. (NASDAQ:TSLA) are declining by 2.66% to $274.9 this morning due to a general market downturn.

In contrast, Tesla shares have increased by over 155% year to date thanks to a robust market overall and solid second-quarter delivery figures.

Higher interest rates make financing more expensive for companies, including Tesla and other producers of electric vehicles.

Increased costs for funding expenditures like raising production capacity or creating new technologies may result from this.

Following better-than-expected US jobs data, major indices are down, which may cause investors to worry about additional rate hikes.

Investors may reevaluate the value of growth-oriented companies like Tesla if interest rates climb.

Higher borrowing costs could make it more difficult for Tesla to invest in future growth and erode profit margins.

As investors change their expectations, rising discount rates brought on by increased interest rates may cause stock prices to decline.