The back and forth leading up to the takeover of Twitter and the erratic decisions to realign the group have left their mark on Tesla. At the upcoming investor day, Musk will not get far with flowery announcements alone. Because the competition is getting closer.
Elon Musk is at a critical juncture: If the Tesla founder wants to keep his disciples, many of whom he scared off with the Twitter antics, he has to deliver more than promises at Investor Day on Wednesday. "He can no longer just come up with sayings," says car expert Stefan Bratzel. The head of the Center of Automotive Management in Bergisch Gladbach says there have been fewer innovations from Tesla recently.
Jürgen Pieper from Bankhaus Metzler takes a similar view. In the long term, Musk will find it increasingly difficult to score with flowery announcements on the financial markets. However, investors who have recently gotten involved can be quite satisfied with the price development. The months of back and forth leading up to the takeover of Twitter and the erratic decisions to realign the group did not leave Tesla unaffected. Investors speculated how many shares in the electric car maker Musk would have to sell to finance the $ 44 billion to buy the short message service.
In autumn 2022 alone, the Tesla price temporarily collapsed by around two-thirds. Almost $ 600 billion in market value disappeared into thin air. But since the beginning of the year things have been looking up again. The increase is currently 64 percent. Tesla is still considered a role model by many in the industry. In 2022, the electric car pioneer from Austin, Texas, was number one worldwide. But the pursuers are now getting closer. In particular, the Chinese electric car manufacturer BYD is hot on Tesla's heels and is already driving ahead in some cases.
According to data from the provider EV-volumes.com, other competitors have also reduced the gap. Accordingly, BYD overtook its US rival in the Asia-Pacific region last year. According to the data, even General Motors is a tad ahead of Tesla there. In Europe, Volkswagen has been setting the tone for electric cars since 2020. While Tesla is catching up here, the US electric-car maker has lost ground in both Asia-Pacific and its home market as competition has intensified.
Tesla is under particular pressure in China. In the world's largest car market, the US company recently had to lower prices on its best-selling models to compete against fast-growing Chinese manufacturers such as BYD, Geely-owned Zeekr and Nio. The pressure is likely to increase if Chinese battery maker CATL implements its plan to lower the price of the batteries used in its vehicles.
Musk announced a "part three master plan" for Wednesday's investor day. In the almost seven years since the last strategy update, Tesla has struck fear into the hearts of established automakers and electric starters with its design, digital car features, battery management and production technology. The high level of productivity has recently enabled Tesla to massively reduce prices. This puts other manufacturers under pressure. The most recent example is Ford, which reduced the price of its Mustang Mach-E SUV by up to $5,900.
But many of Tesla's rivals hardly earn anything from electric cars or even lose money. "Tesla is putting enormous pressure on the competition with its price cuts," says Bratzel. Musk keeps his competitors at bay. In order to score with investors, new vehicles and technologies would have to come onto the market. It's time for the cybertruck, which has been postponed several times, to reach customers, says Bratzel. Autonomous driving is progressing only hesitantly. The "Full Self Driving Beta" system, heavily promoted by Tesla, is still classified as a level two driver assistance system and has been criticized for shortcomings. The competition is also getting closer in automated production.
Musk's image has suffered recently. "He has descended from the high throne as a great visionary," says Bratzel. But there are still many Tesla supporters who are convinced of Musk. Arndt Ellinghorst does not see Musk's situation critically either: "Tesla is so far the only western manufacturer that can stand up to the Chinese electric competition." Musk continues to have the support of investors. It only takes a little to inspire confidence and imagination again.
