Tesla poised to seize greater market share as EV startups struggle and traditional automakers shift focus to hybrids

Tesla poised to seize greater market share as EV startups struggle and traditional automakers shift focus to hybrids

You’re here has had a tough 2024, with shares down 34% year to date. But the electric vehicle industry in general is going through a tough time and, relatively speaking, Elon Musk’s automaker is doing pretty well, says one industry observer.

Garrett Nelson, automotive analyst at CFRA, talk to Fox Business noted this week that Tesla has been competing with Fisker recently hiring restructuring advisors amid talk of possible bankruptcy. And major automakers, he added, are focusing on more to hybrids– which offer owners greater fuel efficiency without the range anxiety – as growth in electric vehicle sales slows.

“This really paves the way for Tesla to grow its market share even further in the years to come,” Nelson said.

While Musk’s automaker faces challenges in China, where competition from electric vehicles is intense, Nelson said, “we kind of view Tesla as the best house on a bad block in the Western market.”

Another sign of this “bad block” was Tesla rival Rivian in the middle doubts on its long-term prospects – recently announcing that it delay construction from a factory in Georgia and save money by building its new upcoming models at its existing factory in Illinois.

“There’s a lot of distress in the electric vehicle industry,” Nelson said.

Of course, Tesla experienced its own existential struggles as an electric vehicle startup not too long ago.

But Tesla today, Nelson said, “is very different from the company of three or four years ago. The company has an investment grade track record. They have over $29 billion in cash, and virtually no debt.”

One thing that has changed since then is that Musk is buying Twitternow X, and continues to express or amplify sometimes controversial positions on the platform.

On Thursday, Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, expressed his frustration with Musk’s leadership and public behavior while talk to Yahoo finance.

“The original story that I think most investors bought into with Tesla didn’t really include Elon and Twitter…For a long time we were all hoping that this wouldn’t really affect Tesla and the demand for its products,” he said. Gerber said. “We all know this happened. Demand for Tesla products is obviously lower. They had to cut prices and do a lot of things that hurt margins and yields and ultimately profits of Tesla.”

As for Nelson, when asked if Musk’s “erratic and compulsive behavior” played a role in the stock’s decline, he replied: “Of course it did.” The stock price reflects all available information about the company, including Musk’s behavior.”

But, he argued, the decline in Tesla stock was long overdue: “If you look closely, last year, Tesla shares more than doubled, and therefore for the stock to have a decline by around 30% is not that surprising. »

His firm bought the dip, he said, with a target price of $275, up from $164 today.

This story was originally featured on Fortune.com

Source Reference

Latest stories