Tesla Is Speeding Away From the Competition
Tesla’s robotaxi event approaches as competitors spin their wheels.
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Three big events loomed large over Tesla TSLA, and the first one, third-quarter deliveries, is now behind us.
Traders were not pleased with the result of 462,890 deliveries. Goldman Sachs GS expected 470,000 deliveries for the quarter.
As a result, Tesla, which traded as high as $263 on October 1, closed at $240 on October 3.
Should we be surprised that Tesla deliveries were a little light, at a time when Toyota TM has put all U.S. EV production on hold? Toyota now says U.S. EV production will begin in late 2025/early 2026. The Japan-based automotive giant cited slow sales.
Ford F has also scaled back its EV plans. Ford has delayed plans for production of an all-electric, next generation pickup truck to 2027, and intends to place greater emphasis on hybrid vehicles.
From Ford CFO John Lawler:
“As we’ve learned in the marketplace, we’ve seen where people have gravitated, we’re going to focus where we have competitive advantage,” Lawler said in an August interview.
Last month, Volvo VLVLY hit the brakes on its plan to become a fully electric automaker by 2030. As of the second quarter of this year, Volvo’s share of the EV market stood at just 0.7%. Volvo has been steadily losing market share for over a year.
My point is, while Tesla deliveries were a bit light, they were fairly close to the mark, in an industry where the competition is struggling mightily.
According to Car Edge, Tesla owns nearly 50% of EV market share. Established competitors like Ford, Volkswagen VWAGY, BMW and Mercedes-Benz are all losing ground. Even relative newcomers like Rivian RIVN are bleeding market share.
Right now, Seoul, South Korea-based Hyundai HYMTF is the only EV manufacturer other than Tesla that can boast double-digit U.S. market share.
Viewed through this lens, I don’t see Tesla’s third-quarter delivery report as a failure. I see a market leader consolidating its gains as some of its biggest competitors are re-evaluating their level of commitment to EVs.
Technically, the $265 area (horizontal line) remains the key. Tesla has now failed to breach that level on three separate occasions — December 2023 (point A), July 2024 (point B), and October 2024 (point C).
The stock has major support in the $220-$225 area.
Meanwhile, Tesla’s “robotaxi" event is scheduled for this coming Thursday. It’s another opportunity for the Austin, Texas-based EV maker to distance itself from its competitors.
Tesla’s next earnings report is scheduled for Oct. 23.
At the time of publication, Ponsi was long TSLA.
