View of the “Tesla Straße 1” road sign in front of the Tesla plant construction site. Tesla boss Musk visits the construction site of his electric car factory.
Jorg Carstensen | images alliance | Getty Images
Tesla has given way in Europe, with its Model 3 now only the fourth best-selling pure electric vehicle (EV) on the continent, according to recent statistics.
The European EV market is now the largest in the world in terms of sales, after an increase in 2020 that accompanied a decline in China. The share of new car registrations that are electric is twice that of China and five times that of the USA
In a note on Wednesday, Saxo Bank’s head of equity strategy, Peter Garnry, said that the overtaking of Tesla by Renault, Volkswagen and Hyundai in recent months must have left shareholders “alarmed”.
“Tesla will succeed and become one of the biggest carmakers of the future, but competition is heating up and that puts the $ 805 billion market value in question,” said Garnry.
Tesla’s shares rose more than 21% in the first two weeks of 2021, having shot up more than 700% in 2020.
Garnry noted that European vehicle registration numbers for November showed that plug-ins, a combination of pure electric and hybrid vehicles, increased 198% year on year, while total car registrations across the continent fell 14%.
Plug-in vehicles now account for around 10% of the overall market share in Europe, with pure EVs representing about 5.4%.
Garnry said customers claimed that Tesla’s sales are typically stronger in the last month of the quarter, but noted that sales fell in October and November.
In the latest EV classifications, the Renault Zoe maintained first place, closely followed by the VW ID.3, according to sales figures from the EV Volumes plug-in vehicle market database. Hyundai’s Kona was third ahead of the Tesla Model 3.
“While this should worry Tesla shareholders, it is even more surprising that the S and X Models are not in the top 20, even though direct competing models like the Audi e-tron are on the list,” added Garnry.
Tesla was not immediately available for comment when contacted by CNBC.
On Thursday, Renault’s new CEO, Luca de Meo, announced that the French automaker would move to a more electric line, along with the construction of a battery factory in France with one of its suppliers.
“We are going to move from an automotive company that works with technology to a technology company that works with cars,” said de Meo.
China demands ‘heart and lungs’
Tesla shares are currently changing hands at $ 845 per share, and in a note on Thursday, American investment firm Wedbush Securities raised its target price from $ 715 to $ 950 per share, with a bullish scenario of $ 1,250.
Wedbush cited an increase in demand for EVs and China’s Model 3, which he defined as the “heart and lungs” of the case for holding Tesla shares.
“While there are more than 150 automakers aggressively pursuing the EV opportunity worldwide, now in the EV market we believe it is the world of Tesla and everyone is paying rent,” said Wedbush analysts Daniel Ives and Strecker Backe in the note.
They projected that by 2022, more than 40% of Tesla’s global delivery sales will come from China, while the Democrats who control all three branches of the U.S. government will provide a substantial boost to EVs more broadly given the country’s climate agenda. President-elect Joe Biden.
“We believe that China’s growth story is worth at least $ 100 per share in a bull case for Tesla, as this EV penetration is set to increase significantly over the next 12 to 18 months, along with major innovations from battery coming out of Giga 3 (Shanghai Tesla Factory) “, they said.