Tesla lost two-thirds of its stock market value in 2022, the victim of fears about demand for electric cars, dismay at Elon Musk’s travails at the helm of Twitter and the end of easy money on Wall Street. The manufacturer nevertheless increased its shipments by 45% during the first three quarters, despite supply problems, and generated nearly $9 billion in profit during this period, despite sharply rising expenses. But it is below the long-term target of increasing deliveries by 50% per year. And observers are worried about a slowdown in sales.
In the past two years, demand has exceeded supply in the electric car market, but this trend should “reverse” in 2023, said Adam Jonas, an analyst for Morgan Stanley, in a note published Wednesday evening. “Between a worsening macroeconomic environment, unaffordable prices for many and growing competition, there are obstacles to overcome,” he said. Many traditional manufacturers now offer electric versions, whether it’s Ford, General Motors, Nissan, Hyundai, Kia or Volkswagen. And in the luxury car category came Mercedes-Benz, BMW, Audi, Polestar, Lucid and Rivian.
Tesla still largely dominates in the U.S. with a 65% market share in the first nine months of the year, but that’s down from 79% in 2020, and that number should drop to less than 20% in 2025, S&P Global analysts predict. To boost sales in the fourth quarter, the group offered unusual promotions in the country. The situation in China is also alarming: according to press releases, production is currently suspended at the factory in Shanghai for a longer period than originally planned.
Tesla will reduce production at its Shanghai factory
However, several analysts point out that Tesla maintains a clear lead in terms of technology, cost management and scale in a rapidly growing market. The Baird company thus assesses in a note published on Wednesday that the group is “best positioned in the automotive market” and still recommends buying the action. However, the shadow of Twitter, bought for 44 billion dollars by Elon Musk in late October, hovers. Tesla needs a “leader who can guide it through the storm” and not a boss “who is Twitter-focused,” Wedbush’s Dan Ives said in a note released Tuesday.
“Stock Market Madness”
On the one hand, the multibillionaire sold several billion dollars of Tesla shares to finance the purchase and then the operating costs of his new toy, and sold again for 3.6 billion in early December, when he had confirmed in the spring that he did not had any intention of selling more. He also took the social network into turmoil, fired half of the employees, authorized the return of suspended internet users like Donald Trump or exiled journalists for unclear reasons. “Musk has lost all credibility with the investment community,” says Dan Ives, citing “broken promises” about stock sales, the “Twitter fiasco” and “political controversies” on the platform.
It has become “unsustainable” to value Tesla without taking into account Elon Musk’s erratic handling of Twitter, Oppenheimer’s Colin Rusch said in a recent note, noting that some buyers are choosing a competing brand because of the fanciful positions. the platform. In defense of the entrepreneur, Tesla’s action has also suffered from the general decline in stock markets this year.
Tesla: Elon Musk tells employees not to worry about current ‘stock market madness’
In a Twitter conversation in mid-December, Elon Musk acknowledged that rising interest rates and the economic situation will likely slow demand for Tesla. But “I still continue to predict that Tesla will be the highest-valued company in the world over the long term,” he said. On Wednesday, in a message to Tesla employees seen by CNBC, he urged them not to “worry too much about the craziness of the stock market.” The group’s share had risen by more than 700% in 2020 and then by 50% in 2021. It has risen by almost 12% in the past two days, but was still seen on Thursday night down 65% from the start of the the year.