Uncertain sales, Elon Musk messed up… Tesla suffered in the stock market in 2022
Tesla lost two-thirds of its value on the stock market in 2022, a victim of fears over demand for electric vehicles, frustration with Elon Musk’s struggles at the head of Twitter and the end of easy money on Wall Street.
However, the manufacturer increased its deliveries by 45% in the first three quarters, despite supply problems, and generated nearly 9 billion dollars in revenue during this period despite a sharp increase in costs. But this falls short of the long-term goal of increasing deliveries by 50% per year.
Stronger competition
And observers worry about a slowdown in sales. In the past two years, demand has exceeded supply in the electric car market, but this trend should “reverse” in 2023, said Adam Jonas, analyst for Morgan Stanley. “Between the deteriorating macroeconomic environment, unaffordable prices for many and growing competition, there are obstacles to overcome. »
Many traditional manufacturers now offer electric versions, whether Ford, General Motors, Nissan, Hyundai, Kia or Volkswagen. And in the category of luxury cars entered Mercedes-Benz, BMW, Audi, Polestar, Lucid and Rivian.
Production in China has been suspended
Tesla still dominates in the United States with a 65% market share in the first nine months of the year, but it is less than 79% in 2020 and this figure should drop to less than 20% in 2025, predict S&P Global analysts. To boost sales in the fourth quarter, the group offered unusual promotions in the country.
The situation in China is also alarming: according to press reports, production is currently suspended at the Shanghai factory for a longer period than initially planned.
Tesla needs a leader
Some analysts point out, however, that Tesla maintains a clear lead, in terms of technology, cost management and scale, in a rapidly growing market. Baird believes the group is the “best positioned in the auto market” and still recommends buying the stock.
However, the shadow of Twitter, which Elon Musk bought for 44 billion dollars at the end of October, is flying. Tesla needs “a leader who can guide it through the storm” and not a boss “who is committed to Twitter,” said Wedbush’s Dan Ives. On the one hand, the multi-billionaire sold several billion dollars of Tesla shares to finance the acquisition and then the operating costs of his new toy, resold for 3.6 billion at the beginning of December when he adopted in the spring n no intention to sell more.
Tesla suspended from Twitter
“Musk has lost credibility in the investment community,” said Dan Ives, referring to “broken promises” in stock sales, “the Twitter fiasco” and “political controversies” on the platform.
It has become “untenable” to value Tesla without taking into account Elon Musk’s mismanagement of Twitter, agrees Oppenheimer’s Colin Rusch, who fears some buyers will opt for a competing brand because of imaginary positions displayed by the company. platform.
Victim of the general decline in the stock markets
In the entrepreneur’s defense, Tesla’s stock has also suffered from the general decline in stock markets this year. In a Twitter conversation in mid-December, Elon Musk acknowledged that rising interest rates and the economic situation will likely slow demand for Tesla.
But “I still predict that in the long run, Tesla will be the company with the highest valuation in the world. On Wednesday, in a message to the company’s employees seen by CNBC, he called on them to “not be too -concern about stock market madness”. The group’s shares jumped more than 700% in 2020 and then 50% in 2021. It recovered nearly 13% in the last three days of the year, but still fell by 65% by 2022 set, giving Tesla a market value of $389 billion.
