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Elon Musk says Chinese electric car brands could ‘demolish’ rivals as Tesla earnings fall



Elon Musk says Chinese electric car brands could ‘demolish’ rivals as Tesla earnings fall​

Brand new Tesla cars sit parked at a Tesla dealership on October 18, 2023 in Corte Madera, California.

Brand new Tesla cars sit parked at a Tesla dealership on October 18, 2023 in Corte Madera, California.
Justin Sullivan/Getty Images
New YorkCNN —

Tesla became the most valuable automaker in the world promising unmatched sales growth. But in the face of growing EV sales by rival brands, Tesla Wednesday backed off its former bullish sales targets.

Tesla has been cutting prices for more than a year to boost sales in the face of greater competition. As a result, the company’s 2023 deliveries were up 38% on the previous year. While that might sound like a big jump, the company previously said it was looking for a 50% annual growth rate when averaged over the course of several years.

On Wednesday it warned its “growth rate may be notably lower” in 2024 than it was last year. Tesla (TSLA) shares dropped 7.5% in premarket trade Thursday.

The fourth quarter marked the first time that the company lost the lead in global EV sales to Chinese automaker BYD.

CEO Elon Musk told analysts on a call that Chinese carmakers are “the most competitive car companies in the world” and “will have significant success outside of China.”

The remarks come as BYD, backed by Warren Buffett, has not only conquered its home turf, but is also making inroads into other markets. It pledged in December to open a factory in Hungary, its first production plant for passenger cars in Europe.

The BYD TANG EV and the BYD HAN EV are displayed during an exhibition test drive as the Chinese electric-vehicle producer announces its expansion to the consumer market next year in Mexico, in Toluca, Mexico, on November 29, 2022.

RELATED ARTICLE Mexico could help this huge Chinese carmaker crack the US market

Rising competition from BYD and other Chinese automakers has sparked an anti-dumping investigation by EU officials that could lead to the imposition of higher tariffs. And Musk — who once scoffed at Chinese EV brands — believes they now pose an existential threat.

“Frankly, I think if there are not trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said.

Tesla’s 50% sales growth target has been a key factor in driving the stock higher and making the company the most valuable automaker on the planet, despite it delivering far fewer vehicles than more established automakers.

The company said its slower growth rate would come as “our teams work on the launch of the next-generation vehicle.”


Alfrescian (Inf)
When Elon Musk opened his gigafactory in Shanghai, part of the deal was that he had to give away free EV tech to those fucking tiongs. In essence, he planted his own imminent demise.


Meanwhile in the real world 3 electric car in fires in china everywhere week. Guess why? I do hope cheapskate sinkies buy those


Tesla Shares Tumble 12% as Musk Predicts Slower Growth
Quiver Quantitative - Tesla (NASDAQ:TSLA) experienced a significant drop in its stock value, nearly 11%, following CEO Elon Musk's announcement of slower sales growth and a focus on developing a more affordable electric vehicle. This projected decrease in market capitalization, which could reach $70 billion, compounds an already challenging month for the automaker, with its valuation potentially shrinking by approximately $200 billion.

The ripple effect of Tesla's forecast was felt across the electric vehicle (EV) industry, with shares of Rivian (NASDAQ:RIVN), Lucid Group (NASDAQ:LCID), and Fisker (NYSE:FSR) also declining. The EV sector, already facing a demand slowdown, may experience intensified pressure from Tesla's aggressive pricing strategies.

Market Overview: -Tesla plummets on CEO Musk's projected sales slowdown, potentially erasing $50 billion in market value. -Ripples spread across the EV sector, with Rivian, Lucid, and Fisker taking hits. -Investor concerns mount about margin pressure and intensifying competition, particularly from BYD (SZ:002594) in China. -"Magnificent Seven" tech stocks, including Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), offer potentially safer havens amid Tesla's turmoil.

Key Points: -Musk's focus on a future electric vehicle overshadows disappointing near-term growth prospects, dampening investor sentiment. -Price cuts to boost sales raise profitability concerns, adding to the bearish narrative. -The broader EV industry braces for increased pressure due to Tesla's aggressive discounting strategy. -Tesla's high valuation becomes difficult to justify with dwindling growth and weakening margins.

Looking Ahead: -Wall Street adjusts its gears, potentially shifting focus towards tech giants with more predictable near-term performance. -The upcoming earnings season for the "Magnificent Seven" will be crucial in gauging overall market sentiment and potential rotation away from riskier bets like Tesla. -Balancing concerns about Tesla's slowdown with a resilient economic backdrop will be a key challenge for investors navigating the current landscape.

Concerns about Tesla's future profitability and competitiveness, especially in key markets like China, are growing. The company's high valuation, at nearly 60 times its 12-month forward earnings estimates, positions it alongside other major tech companies, yet Tesla's current challenges may lead to a reassessment of this valuation.

As analysts debate Tesla's evolving status in the auto industry, some suggest that it may increasingly resemble a traditional automaker, a shift that could impact its premium valuation and investor expectations.

This article was originally published on Quiver Quantitative