Tesla keeps facing arduous challenges even after the recent robotaxi event.
Tesla, one of the world’s largest electric vehicle manufacturers, will report quarterly earnings on Wednesday, the first “Magnificent 7” stock to do so this season. After the report, CEO Elon Musk will deliver a statement to analysts and investors, who will likely have much to ask.
Earlier this month, Tesla unveiled its first new models since 2019, when the Cybertruck was announced. This time, Elon Musk stepped on stage to reveal Tesla’s robotaxi, a self-driving cab supposed to take the streets of major American cities by 2026.
The company is late in the robotaxi business, with competitors like Google’s Waymo already operating in US cities.
Investors did not approve of the robotaxi event, with Tesla’s stock dropping over 9% in the following days. At the moment, Tesla’s stock price trades 7.65% lower year-to-date, the worst performance of the Magnificent 7 group.
The stock knew better moments this year, especially in the lead-up to the robotaxi event. At its highest, the stock traded 22% up year-to-date in July.
Declining market share
The disappointing robotaxi event was just the last of several issues plaguing Tesla.
Chief amongst them is the competition from China, eroding Tesla’s market share at an impressive speed. Earlier this year, Tesla lost its spot as the world’s largest EV car maker to Shenzhen-based BYD, which barely exports outside of China.
Even at home, Tesla faces increasing competition from legacy carmakers joining the EV segment. Ford, General Motors, and historic European brands like BMW and Mercedes are ramping up their EV production. Ford and General Motors saw double-digit growth in their EV segments this year.
Still, Tesla is by far the largest EV company in the United States, selling millions of cars every year. However, analysts predict that 2024 will be the first year in Tesla’s history when its car deliveries will decline compared to the previous year.
Specifically, Tesla’s 2024 deliveries could slip by 0.3% to 1.8 million.
AutoGuide editorial director Greg Migliore likens investor expectations to “a tale of two Teslas... there’s what Tesla is doing right now, which is its current automotive business, and then what it’s going to do in the next year, next two years.”
Tesla is currently the highest-valued car stock, mainly because investors don’t see it as a carmaker company but as a high-tech firm. Its innovation in the artificial intelligence segment is what gives investors hope. And also what could lead them away from Musk’s empty promises.
