EV hits speed bumps
After doubling in 2023, Tesla’s share price has come off by 26.5% this year, including 12% last Thursday when it warned the market that sales growth would be notably lower in 2024. Revenue growth came in at the slowest rate for more than three years at 3%, and while Tesla met its target of delivering 1.8-million cars in 2023, it failed to give a delivery target for 2024. A series of price cuts bit into margins, while capital expenditure remained at record levels of more than $10bn in 2023.
Consumer enthusiasm for the electric vehicle (EV) revolution seems to have cooled off due to concerns over the price of vehicles, range, collapsing secondhand values, insurance costs and the lack of reliable charging infrastructure in many countries.
Adoption rates vary wildly by country, with Norway predictably leading the charge at 89% of new car registrations, way ahead of a mere 7.6% in the key US market. Musk is hoping that this will rise when Tesla launches a lowerpriced model in the second half of 2025, which will also compete with a flood of Chinese manufacturers starting to move into the export markets.
Tesla was overtaken by BYD last quarter as the world’s biggestselling EV manufacturer, and
Musk was quoted last week as saying that Chinese manufacturers would “demolish” global rivals without significant trade barriers. This is becoming a factor in the US presidential election, with President Joe Biden promising that he won’t allow the Chinese to dominate the EV market, while The Donald is itching to construct tariff walls that will dwarf his previous efforts on the Mexican border.