Tesla Inc. is on the verge of losing a key bragging right it’s held for the past six years: outselling all EV competitors in the US combined.
In the 12 months through May, Tesla sold approximately 618,000 electric cars in the US, compared with about 597,000 fully electric vehicles sold by other manufacturers, according to the latest figures from Marklines, a provider of monthly auto industry sales data. Next week, carmakers are slated to report second-quarter sales, which will include popular new models from General Motors Co., Hyundai Motor Co. and its affiliated Kia Corp.
More than a car company
To be clear, Tesla remains the biggest EV-maker in the US by a long shot. Over the past 12 months, it sold more than five times as many electric cars in the country as its closest rival, Hyundai/Kia. Tesla also makes the best-selling car in the world, the Model Y, and sells more fully electric vehicles globally than anyone else.
It’s also the world’s most valuable car company, even after a major slump in the stock price. Tesla is worth around $575 billion — less than half of its peak $1.2 trillion market cap in 2021, but still almost 85% more than the second biggest automaker, Toyota Motor Corp.
The few companies that have been able to claim a market majority similar to Tesla’s in the US are peerless in their industries. Apple has it for smartphones, Google for internet search, and Nvidia for AI chips. Such unrivaled dominance helped each of those tech giants reach stock valuations of more than $2 trillion. And like those companies, Tesla also has more diverse aspirations. Musk has said its consumer automotive business will eventually be dwarfed by its clean-energy division, Cybercab taxi service and humanoid robots.
Morgan Stanley analyst Adam Jonas said last week that Tesla’s stock price remains at risk as long as investors see it as auto company stuck in an increasingly competitive market. But in the long term, Jonas anticipates Tesla will be valued like the other tech companies that moved beyond their first conquests. “The car is to Tesla what the video game chip is to Nvidia. The car is to Tesla what selling books is to Amazon,” he said.
For now, though, the car business generates more than 90% of Tesla’s revenue. And it’s worth noting that both of Jonas’s examples were able to retain their core market majorities, in video game chips and books. With EVs, Tesla may not be able to do the same.
A message from Advisor Perspectives and VettaFi: To learn more about this and other topics, check out ourpodcasts.
Bloomberg News provided this article. For more articles like this please visit
bloomberg.com.
