After years of absolute dominance, signs are now emerging that the more popular EV name could be losing its hold on the markets. Morgan Stanley just reported that Tesla Inc.’s (NASDAQ: TSLA) US EV market share fell to 69% in February from 81% a year ago.
One possible red flag: Tesla is primarily losing market share to deep-pocketed ICE incumbents.
According to Morgan Stanley, Ford Motor Co.The Mustang Mach-E (NYSE: F) accounted for nearly 100% of the share loss.
Ford’s iconic Battery Electric Vehicle (BEV) has earned accolades from numerous leading automotive publications, and its strong initial sales suggest that traditional automakers may have finally figured out how to go head-to-head with the axle of vehicles. electrical
Meanwhile, a teardown of Volkswagen AGThe first dedicated electric vehicle (OTCPK: VLKAF), ID.3, has been found to compare favorably to Tesla models, and UBS declared it as “the most credible challenger for Tesla so far “. Volkswagen is the second largest car manufacturer in the world.
The reveal comes amid a major correction in the electric vehicle sector.
Over the past four weeks, the selloff has hit nearly every major electric vehicle name and Tesla is down 30%. But Tesla’s slide looks tame compared to Workhorse group (NASDAQ: WKHS) -62%, XPeng (NYSE: XPEV) -41%, Nikola (NASDAQ: NKLA) -39%, Electrameccanica (NASDAQ: SOLO) -38%, Child (NYSE: NIO) -34%, Canoo (NASDAQ: GOEV) -32%, Kandi Technologies (NASDAQ: KNDI) -30%, and Hyliion Holdings (NYSE: HYLN) -21%. Related: Oil Soars As OPEC + Sources Suggest No Production Increase
The total loss of market capitalization in the EV space now stands at a staggering $ 730 billion from a peak a month ago.
Tesla only reports global sales quarterly and not monthly, as many other automakers do. However, Morgan Stanley has estimated that the electric vehicle maker posted sales growth of 5.4% in February. That’s pretty tacky by Tesla standards and seems particularly concerning when you consider that electric vehicle sales in the United States rose 34% much faster during the month.
New electric vehicle offerings from traditional automakers more than doubled to 9,527 vehicles sold in February, with Ford’s Mach-E winning SUV of the year honors this year with 3,739 units. That’s impressive considering it just started shipping in January. Even more impressive is the fact that 70% of Mach-E buyers were new Ford customers, making the car that much more valuable to the automaker.
Tesla faces increasingly stiff competition for its luxury Model S sedan and Model X SUV from traditional automakers like BMW, Audi, Jaguar, Y Porsche, together with the competence of Volkswagen, Nissan, Chevrolet Hyundai, Kiaand now Ford for its lower priced Model 3 sedan and Model Y SUV. The Model 3 and Model Y accounted for ~ 90% of Tesla’s sales during the fourth quarter.
But Tesla’s biggest concern will be the fact that it is losing the battle for dominance in the all-important European market.
Volkswagen dominating Europe
Tesla has lagged behind Volkswagen in EV sales in many European markets, including Norway, where EVs account for the majority of new vehicle sales.
Last year, Tesla sold 98,000 vehicles in Europe, down from the 109,000 units it moved a year earlier. In contrast, 2020 was a banner year for electric vehicle sellers on the continent, with nearly 1.4 million plug-in passenger cars sold, an increase of 137%. As a result, Tesla fell to third place in the European electric vehicle market after its market share fell from 31% to 13.4%. Related: Russia’s Gazprom Has First Carbon Neutral LNG Delivery In Europe
Volkswagen will seek to consolidate its leadership with the new ID.3. UBS’s deep dive into ID.3 concluded that the platform underpinning VW’s EV models is set up to be completely cost-competitive with Tesla and also boasts best-in-class energy density and efficiency. The ID.3 is primarily aimed at the European market, and VW plans to flank the car with a crossover sibling, the ID.4, which will be produced in China and the US, as well as Germany.
Tesla also has to deal with new competition from another piston heavyweight: General motors (NYSE: GM), which just introduced the Bolt EUV, a compact SUV version of the Chevrolet Bolt. The Bolt EUV is scheduled to go on sale in early summer and will be priced lower than the Model 3 and Model Y.
However, these are initial numbers and investors will have to wait a few quarters to get a good idea of how Tesla is dealing with increasing competition in the EV space, especially in Europe.
Mass buying opportunity
Despite the strong selloff in the EV industry, a section of Wall Street is saying that the EV party is just getting started and that it will use it as a buying opportunity.
According to Dan Ives of Wedbush Securities
“Our answer is emphatically that the party and the transformation of electric vehicles are just beginning, as this industry is on the cusp of a $ 5 trillion market opportunity over the next decade. With GM, Ford and now Volvo (OTCPK: VOLAF) Everyone Jumping to the Bottom of the Pool in Electric Vehicles, talks about the huge pent-up global demand for electric vehicle technology on the horizon. “
Ives says the ongoing green tsunami is likely to take EV penetration from the current 3% to 10% by 2025.
By Alex Kimani for Oil.eu
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