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Companies like GM, Toyota and Nissan have been trying to compete against Tesla for years with sub-par electric vehicle offerings. Inexpensive, but ultimately not up to the standards of vehicles produced under Elon Musk’s guidance.
Now, however, Tesla’s years of minimum competition may be over. High-end automakers like Jaguar and Audi are bringing new models to customers with features and performance that rival Tesla, and according to some analysts are stealing market share from the electric vehicle pioneer. Maggie Fitzgerald reports for CNBC:
Competition is weighing on Tesla’s sales, according to A.B. Bernstein.
The firm said increased competition abroad is responsible for the recent weakness in Tesla’s sales volume.
“Our analysis suggests that the deteriorating sales trajectory of the Model S and X may be primarily due to competition, particularly in Europe, from Jaguar and Audi,” said Bernstein’s senior technology analyst Toni Sacconaghi in a note to clients on Wednesday.
Tesla’s financials have been weighed down this year due to the Model S an X volumes falling, the analyst said. In the first half of 2019, the Model S and X gross profit dollars fell 57% year-over-year, Bernstein notes. Typically, Tesla produces about 20,000 to 25,000 Model S and X cars each quarter, but a drop in orders brings the average to around 14,000 per quarter. Tesla’s stock has reflected the weakness, as it has plummeted more than 30% this year.
Sacconaghi said Tesla’s sales weakness is brought on by competition, specially in Europe. New European luxury vehicles like the Audi E-Tron and the Jaguar I-Pace are all taking market share. Anticipated releases from Mercedes and Porsche could worsen the problem, he said.
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