Minus 20% or $13,500 gain depending on model and chassis: When Elon Musk decides to kick off the Tesla sales period, he doesn’t do half the work, but throws a damn stone into the pool of competition, which is hard to follow.
A sign that the brand is doing well? Not quite, but rather the opposite, is quite logically analyzed by Business Insider, who characterizes Musk as “pushed to the wall.” Indeed, for several months now, clouds have been gathering over the once endlessly rosy future of the world leader in electric vehicles.
It won’t escape anyone: Tesla is in a very bad position in the stock market and has experienced much bigger shocks in 2022 than other tech companies that have also been hit. The stock price of the manufacturer, once valued at over $1,000 billion, has fallen nearly 65% in a matter of months.
The dizzying fall, fueled in part by Musk’s time on Twitter, his newest toy, drew the logical ire of the brand’s shareholders, unhappy that his boss was focusing on other goals.
The biggest concern is demand: for a developer whose waiting lists were once full, it is now starting to seriously crumble. This is especially true in China: as the New York Times explains, Tesla is now facing stiff competition there, in particular the very dynamic BYD, and its sales have fallen in recent months.
In December, despite promotions causing major upheaval, Tesla sold 56,000 new vehicles in China, down 21% from the same month in 2021 and 44% from November: if the country is still very fond of mask cars, a tendency to cause some panic.
Second hand, second chance
Another sign has not fooled observers in recent months. After a long, insane period of shortages, during which used cars could sometimes cost more than equally new models, the trend has reversed.
Thus, according to Reuters, the used Tesla “bubble” burst, raising concerns about demand for new cars and no doubt hastening Musk’s decision to start slashing their prices.
It can also be explained by concerns about interest rates constantly rising to fight inflation, a move that Musk has been fighting against the wind for months.
A Fed tightening that makes it more expensive and more difficult to finance a new car, he said, risks plunging the U.S. into a major recession — or even a major financial crisis — and repayable loans are no longer tolerable for people who have already contracted them.
The trend is worrying. The Fed needs to cut interest rates immediately. They greatly increase the likelihood of a severe recession.
— Elon Musk (@elonmusk) November 30, 2022
Competition, builders with very strong backs, and upgrades to their weapons in the rest of the world, so Tesla had to try everything to overtake her rivals. Problem: People who have recently invested in one of the manufacturer’s vehicles feel deeply betrayed, in part because their resale value has plummeted and plummeted.
In addition, the firm’s short-term profits would logically suffer greatly from these monstrous balance sheets. While Tesla has already struggled with recent results that have been seen as disappointing, its revenue could fall as much as 25% in the coming months.
Betting that this will only be temporary, and that increased demand will allow the brand to reverse a worrying erosion trend.
Global demand for electric vehicles remains high and growing, with Tesla still well ahead of its sometimes struggling rivals and its vehicles suddenly becoming much more competitive. Perhaps it was time for her, in order to save her skin, to stomp into the anthill again.