2024-04-17 21:16:00
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The sales figures published by the electric car manufacturers Tesla and BYD at the beginning of April disappointed investors and analysts. And the shares of vehicle manufacturers have also been trending downward recently. What is the current state of the industry?
• Tesla & Co. are struggling with lower delivery figures
• E-car stocks under pressure
• US election in view
Tesla disappoints with delivery figures
At the beginning of April, the US electric car manufacturer Tesla published delivery figures for the first quarter of the year. While things have been improving in the past few quarters since the corona pandemic, the group led by Elon Musk has now reported a decline in sales for the first time. The company sold 386,810 electric cars between January and March, after 423,000 in the same quarter last year. Experts had assumed around 449,000 deliveries.
BYD loses pole position again to Tesla
Things didn’t go any better for Chinese competitor BYD either: in the first three months of the year, the vehicle manufacturer sold a total of 626,263 New Energy Vehicles (NEV), i.e. vehicles with an alternative drive system. This means that the group exceeded Tesla’s deliveries, but if you only take electric cars into account and not plug-in hybrids, BYD only comes to 300,114 units. Here too, experts had expected higher delivery figures. In addition, the Chinese competitor had to give up its pole position as the world’s largest electric car manufacturer to Tesla.
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Losses worth trillions
But it’s not just Tesla and BYD that are currently struggling, other competitors are also facing challenges. The industry’s weakness can be seen primarily in the prices of electric car shares. As an analysis by “Handelsblatt” shows, manufacturers of electric cars have lost around $1 trillion in value on the stock market since 2021. In terms of US stocks, Tesla, Rivian, Lucid & Co. are in a downward trend. “There was once a phase when Rivian was more valuable on the stock market than the German car company VW,” said Holger Zschäpitz from the business editorial team of “WELT” in the podcast “Alles auf Aktien” recently. “That no longer seems conceivable. The electric car fantasy on the stock market has waned significantly.” His colleague and co-host Anja Ettel added that numerous industry rivals such as Lordstown, Proterra and Volta Trucks have failed due to the competitive situation and had to file for bankruptcy. But there is also evidence of price weakness beyond the USA. The shares of Chinese competitors BYD and NIO have recently fallen significantly.
Sinking Margins Tax Tesla & Co.
Ettel and Zschäpitz identified declining margins as the main problem in the e-car industry, as can be seen from the example of Tesla. “The industry’s price collapse also reflects investors’ frustration that the growth prospects were somewhat overestimated in the hype, and the declining margins in particular are causing problems for manufacturers,” the moderator interjected. “At Tesla, for example, operating profit, EBITDA, doubled in 2020 and 2021, but in 2023 it fell by 13 percent.” And there are also problems in terms of sales, as Ettel added. “Tesla has already canceled its own sales forecast for this year and because the group tried to boost falling sales with discounts, the operating margin has also fallen significantly, namely from 17 to just 8 percent. And VW is at 7 percent not far from it at all.”
Trump’s victory could be a test
“The fall in share prices is also worrying because electric car manufacturers continue to benefit from stricter emissions regulations and generous subsidies,” Ettel pointed out. The US Environmental Protection Agency (EPA) recently presented new emissions regulations that will apply from 2030. Then 31 to 44 percent of new cars will have to be completely electric. However, the Handelsblatt reported that the authority initially estimated a share of 60 percent, but lobbyists from the combustion industry were able to get their way and pushed the value down. “And if Donald Trump wins the US presidential election, then the subsidies for electric cars in the USA may even be eliminated completely, with corresponding consequences for sales,” added Zschäpitz.
Rocky road for the e-car industry
“Are e-car stocks bad per se?” Ettel asked in conclusion and immediately gave the all-clear – at least partially. “Of course, it’s not that simple. Anyone who invested in Tesla early on is of course still enjoying huge price gains today and there is no doubt at all that the technology will continue to establish itself.” Expert opinions also give hope. The analysis company JD Power assumes that the market share of electric cars will be more than 50 percent from 2031. “But there is still a long way to go until then, and it will probably be much rockier than the first big hype suggested.”
Editorial team finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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