Is Tesla facing challenges? Feel even more sorry for its aspiring EV competitors
Lately, Tesla has been experiencing a rough patch. In January, the electric-vehicle (EV) pioneer cautioned that growth would be “notably lower” this year, as interest in battery power wanes. It also had to halt most production at its massive factory near Berlin due to supply disruptions caused by turmoil in the Red Sea. Its market share in China, the world’s largest EV market, is declining as it contends with cheaper local competition, particularly from BYD, which briefly surpassed Tesla as the world’s largest EV-maker late last year.
On April 2nd, Tesla reported that it had delivered fewer than 390,000 cars in the first quarter, down by 8.5% from a year ago. This was worse than what Wall Street analysts were expecting, causing Tesla’s market value to drop by a third this year, to less than $550bn. This is still more than any other carmaker, but a significant decrease from the $1.2trn it was worth in 2021. Elon Musk, its CEO, is now only the world’s third-richest man.
If you think Elon Musk and Tesla are having a tough time, consider the struggles of their once high-flying imitators. Three years ago, as Mr. Musk demonstrated that EV-making could be a trillion-dollar business, investors rushed to support the newcomers promising to be the next Tesla. Two American startups that had gone public earlier that year were accelerating as briskly as their cars. The market capitalization of Lucid Motors, founded in 2007, exceeded $90bn; that of Rivian, created two years later, hit around $150bn. Each was worth more than Ford, which was nearly 120 years old and sold 4m vehicles in 2021, compared with 125 for Lucid and 920 for Rivian. Chinese rivals such as Li Auto (founded in 2015), Nio and Xpeng (both in 2014) were also valued richly. In late 2021, the combined market value of six prominent Tesla wannabes hit a staggering $400bn.
2024-04-07 06:46:53
Original from www.economist.com