In thoughts and numbers, Tesla remains the star of the auto industry.
The market cap of Elon Musk’s group is above $532 billion at last audit. Toyota (TM) – Get a free reportGeneral engines (GM) – Get a free reportFord (F) – Get a free report and Volkswagen (VWAGIE) – Get a free report are far behind with market values of $199 billion, $57 billion, $56.5 billion and nearly $100 billion, respectively.
The manufacturer continues to collect trophies and consolidate its position as a global leader in the electric vehicle market. For example, the group accounted for two-thirds of new EV registrations between January and August in the US, according to data from Experian.
Two of its models, the Model Y SUV and the entry-level Model 3 sedan, occupy the top two spots on the list of best-selling electric vehicles in the U.S. market with 134,978 and 123,634 units sold, respectively. Ford’s Mach-E SUV comes in third with 25,596 units sold.
And the top 5 is completed by the Tesla Model S and the Model X. Sure, the competition is gaining market share, but the automaker Austin is still the giant of the industry.
$580 billion in market value wiped out
At the same time, Tesla’s star has been fading in recent months. Once a daily star on the New York Stock Exchange and a bold name on social media, Tesla seems to have all but disappeared except in the context of its stock market slump.
Tesla stock is down 52% this year, translating to a $580 billion drop in market cap. By comparison, GM shares have lost 32% of their value this year and Ford shares are down 31%. In the past, it was often the opposite: Tesla performed much better than its rivals and compatriots.
After losing half of its market value, the company was overtaken by Berkshire Hathaway (BRK.A) – Get a free report, (BRK.B) – Get a free report the holding company of the legendary investor Warren Buffett, in the ranking of the largest companies on that basis.
Tesla is now the world’s seventh largest company, with a market capitalization of $534 billion, behind Berkshire, sixth with $690 billion. The top 5 is unchanged: Apple (AAPL) – Get a free reportSaudi Aramco, Microsoft (MSFT) – Get a free reportAlphabet (GOOGL) – Get a free report and Amazon (AMZN) – Get a free report.
However, the company’s fundamentals are very solid. For the third quarter, Tesla posted adjusted earnings before interest, taxes, depreciation and amortization of nearly $5 billion, up 55% year-over-year, while sales rose 56% to $21.5 billion.
Tesla delivered 907,573 vehicles in the first nine months of 2022, up 45% year-over-year, and produced 927,910 cars, up nearly 49%.
The company also has a clear roadmap: Tesla must deliver its first semi-truck to PepsiCo on December 1 (FUT) – Get a free report and will begin production of the highly anticipated Cybertruck in mid-2023. These will be followed in 2024 by the new generation Roadster and the first model in its line of autonomous vehicles. The company also plans to produce Optimus, its humanoid robot, from 2023.
The resurgence of Covid-19 in China raises concerns that production at Tesla’s Shanghai factory may be interrupted. But that’s not the main factor in the share’s decline, which has been going on for quite some time.
Analysts and investors attribute the share price drop to CEO Elon Musk’s acquisition of the social network Twitter.
$TSLA continues to underperform (TSLA -20% vs [Nasdaq 100 Index] +3%) since Elon completed its purchase of TWTR on 10/28,” said Tesla investor Gary Black. “This reflects investor concerns that the loss of TWTR in [revenues] requires more capital from @elonmusk and continued uncertainty about sales and pricing in China.”
Since purchasing the platform for $44 billion on Oct. 27, the billionaire has spent most of his time talking on Twitter. The rare few times he mentions Tesla’s name comes when he asks a question on social media.
Musk is Tesla’s craftsman, architect, and chief ambassador. Prior to Twitter, the tech mogul promoted the EV company on an almost daily basis, helping to keep the brand talking.
Since Twitter, the automaker now seems less of a priority for Musk, who is trying to find sources of revenue to make the microblogging platform profitable.
He’s putting all his energy into it right now — after wreaking havoc there less than a month after he took over. He laid off nearly 70% of the company’s 7,500 employees and reactivated former President Donald Trump’s account. This latest decision worries advertisers, who don’t want their brands associated with racist and hate speech and misinformation.
The serial entrepreneur recently admitted that he has hardly slept since taking over Twitter.
“I have too much work on my plate, that’s for sure,” Musk said on Nov. 14 during an appearance at B20 Indonesia, a business conference alongside the G20 summit in Bali. “I work the most I can work — morning to night, seven days a week.”
A few days earlier, Musk also told attendees at the 29th annual Baron Investment Conference that his workload has increased from 70 hours a week to 120.
“But I think once Twitter gets on the right track, it will be much easier to manage than SpaceX or Tesla.”
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