Tesla is overdue on Wall Street

Tesla has lost two-thirds of its stock value in 2022, a victim of fears about demand for electric cars, the woes of Elon Musk at the helm of Twitter and the end of easy money on Wall Street. The manufacturer nevertheless increased shipments by 45% in the first three quarters, despite the supply problems, and posted a profit of about $9 billion during the period, despite sharply rising costs. But this is below the long-term target of increasing shipments by 50% per year. Observers are concerned about the decline in sales.

Demand has outstripped supply in the electric car market for the past two years, but that trend “should reverse” in 2023, Morgan Stanley analyst Adam Jonas said in a note published late Wednesday. “Between a deteriorating macroeconomic environment, unaffordable prices for many, and increased competition, there are hurdles to overcome. Many traditional manufacturers now offer electric versions, be it Ford, General Motors, Nissan, Hyundai, Kia or Volkswagen. The category of luxury cars included Mercedes-Benz, BMW, Audi, Polestar, Lucid and Rivian.

Dogged Domination

Tesla still dominates 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 below 20% in 2025, analysts at S&P Global forecast. should fall. To boost sales in the fourth quarter, the group offered unusual promotions in the country. The situation in China is also worrying: according to the media, production at the Shanghai factory has been suspended for longer than originally planned.

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However, several analysts note that Tesla maintains clear leadership in terms of technology, cost management and scale in a rapidly growing market. As such, Baird’s firm estimates the group has “the best position in the auto market” in a note released on Wednesday and still recommends buying the stock. However, the shadow of Twitter, which was bought by Elon Musk for $44 billion at the end of October, looms large. Wedbush’s Dan Ives said in a note Tuesday that Tesla needs “a leader who can lead it through the storm,” not a boss who is “in the Twitter spotlight.”

“Stock market frenzy”

On the one hand, the multi-billionaire sold several billion dollars worth of Tesla shares to finance the purchase of his new toy and then operating costs, which he sold again for 3.6 billion, as he confirmed in the spring in early December. intends to sell more. He has also thrown the social network into disarray, firing half the staff, allowing suspended internet users like Donald Trump to return, or firing journalists for inexplicable reasons. “Musk has lost all credibility with the investment community,” says Dan Ives, citing the stock sale’s “broken promises,” the “Twitter fiasco” and “political controversies” on the platform.

Oppenheimer’s Colin Rusch noted that some buyers prefer the rival brand because of dreamy positions, making it “appropriate” to rate Tesla despite Elon Musk’s erratic behavior on Twitter. platform. In defense of the entrepreneur, Tesla’s move has also suffered from the general decline in the stock markets this year.

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Tesla: Elon Musk asks employees not to worry about current ‘stock market madness’

In a mid-December Twitter chat, Elon Musk acknowledged that rising interest rates and the economic climate will likely slow demand for Tesla. But “I still continue to predict that Tesla will be the most valuable company in the world in the long term,” he said. In a message to Tesla employees seen by CNBC on Wednesday, he urged them “not to worry too much about the stock market frenzy.” The group’s share increased by more than 700% in 2020 and 50% in 2021. It has recovered about 12% over the past two days, but was “down 65% year-to-date” on Thursday evening.

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