Tesla stock was one of the losers of 2022. From over $384 last spring, U.S. stock dropped more than 70 percent to $101 in less than a year. This means a stock market loss of over $750 billion.
Tesla has also been below expectations when it comes to car sales recently. Tesla Model Y was the best-selling new car in Switzerland in 2022, while the profitable brand since the third quarter of 2019 was in the top ten for the first time. But Tesla sales are stagnant in China, the world’s largest market. The Model 3 and Model Y were discounted up to 20 percent for the second time to revive the sluggish sales there. Despite the displeasure of all Chinese customers who have recently purchased their Model 3 or Y at a higher price.
Focus more on core business
Things are not going well at Tesla right now. The reasons for this are far more complex than maintaining the car brand, with a CEO making a name for himself with the takeover of text messaging service Twitter last quarter. Many customers resent Elon Musk (51) for taking over Twitter. The idea is that Musk should concentrate more on the car section than politics.
When it comes to cars, Tesla has now lost its lead in the competition. This doesn’t just apply to Europe’s secondary arena, where brands like Audi, BMW, Mercedes, Polestar and Porsche have overtaken Tesla. In America, too, General Motors (GM) and Ford have awakened from their “electric sleep” and have now launched electric cars that can easily compete with Tesla’s. Stellantis Group’s announcement at the Consumer Electronics Show (CES) held in Las Vegas (USA) last week that it will focus on electromobility worldwide further increases the pressure on Tesla.
Tesla’s competitive situation in China looks even worse than in the US domestic market. Every few weeks, new electric car manufacturers appear, or famous big companies like BYD launch new electric brands (for example, Yangwang). Not only have Chinese manufacturers been technologically up to date for a long time, they no longer have to hide when it comes to design. Additionally, not only because of local production – Tesla also manufactures in the greater Shanghai area – selling prices from Chinese competitors are well below the Tesla level.
Missed development progress
Former electric pioneer Tesla also missed important development steps. For example, those for the popular 800-volt charging technology. These are currently available at Audi, Porsche, Kia and Hyundai, and other brands will follow this year. In Tesla, however, nothing is heard. And the level 3 driver assistance system long-announced by Musk still isn’t offered, and so the coast-to-coast driving announced in the US without hands on the wheel still doesn’t show up. What’s worse: Tesla’s autopilot continues to cause crashes in Los Angeles (USA) this week, as the autopilot suddenly braked and triggered an accident.
Tesla also suffers from the fact that its portfolio of manageable models must first be built on a solid international footing. But now Tesla models are slowly getting old. The Model S should have been modified a long time ago. And even the delayed start of sales of the top model Plaid in Europe provides neither significant image gain nor necessary sales figures. The situation is similar in the Model X, whose driving performance is on show. However, the luxury crossover is too heavy and too expensive. It is hardly consoling that many of the gullwing’s technical problems seem to have finally been resolved. The Model X would also have to be gradually replaced due to strong competition from Asia, Europe and the USA.
Cannibalism despite a small model range
But that’s as little planned as a replacement for the older Model S, which can hardly keep up with the younger rival Audi E-Tron GT, BMW i7 or Mercedes EQS models in terms of technology. But the biggest competition for the Model S comes from within the company. Instead of the Model S, most people now buy the much more modern Model 3. While this is more compact, it’s much cheaper – but with a much smaller contribution margin for Tesla. It’s a problem the Model X struggles with as well. Practically only the more compact and less expensive Model Y is bought instead of the large and expensive Model X. Another crossover, as the younger brother of Model Y, would perhaps be a relief. Such a vehicle should be talked about over and over again at Tesla. Only: Concrete plans for production and marketing are currently unknown.
Until recently, it was unpredictable that Tesla would allow oil to be taken off the bread for full-size pickups, even in his homeland of the USA. But the Ford F-150 Lightning is already squinting at more than the polarizing Tesla Cybertruck. And soon the next best-selling electric pickups will be the Chevrolet Silverado EV and Ram 1500 Revolution BEV. So there are tough times for Tesla, too. Musk continues to confidently claim that Cybertruck has received over a million pre-orders. However, many customers may have switched to the F-150 Lightning, which has a good chance of coming to Europe. Currently not planned for Tesla Cybertruck.
The question is whether Tesla can delay a CEO change much longer. Because more and more Tesla customers continue to be convinced of the products, but Tesla wants a new head at the wheel. Or at least a CEO for whom Tesla is once again the main place of work. At least there seems to be a rapid improvement in this regard. Because Elon Musk wants to hand over the Twitter leadership as soon as possible after a user vote. However, it is doubtful whether he will remain outside the administration afterwards.