While founder and CEO Elon Musk’s unpredictable management of Twitter has forced Tesla stock into a sharp decline, the carmaker’s models remain popular through most of 2022, according to Cox Automotive’s Kelley Blue Book.
For the first nine months of 2022, it was reported that four of the top six best-selling electric cars were Teslas. At the top of the rankings were the Tesla Model Y, with 191,451 units sold, and the Model 3, with 156,357 units. The Ford Mustang Mach-E stood third with 28,089 units.
“With all the negative headlines surrounding Tesla and its increasingly controversial CEO Elon Musk in recent weeks, it’s easy to forget that the company’s cars are still very popular,” data journalist Felix Richter wrote Tuesday on Statista.
“While it is too early to say whether Musk’s Twitter acquisition and the unrest that accompanied it will have a significant negative impact on demand for Tesla’s cars,” he continued, “its current position as the maker of the most popular electric cars in the United States And evident in many parts of the world.”
power of the first mover
In the EV space, Tesla has been wildly popular, and it remains so, observed Brent Gruber, executive director of global automotive at JD Power, a consumer research, data and analytics firm based in Troy, Michigan.
Citing data from JDP’s December survey, Gruber said that four out of 10 buyers looking to buy a vehicle in the next 12 months are “very” or “somewhat” likely to buy an EV. Considering the Tesla brand. “It’s second only to Chevrolet,” Gruber told TechNewsWorld.
“However,” he continued, “the percentage of those potential EV shoppers who are considering Tesla has declined by five percentage points since November.”
Chris Jones, principal analyst at global market research company Canalys, said Tesla still benefits from being a first mover in the EV market.
“There was very little competition, and there still isn’t much competition,” Jones told TechNewsWorld.
“Tesla also had a status appeal that the Nissan Leaf, Chevy Volt, BMW i3 didn’t have at the time,” he added.
Another attractive feature for early customers, he continued, were over-the-air updates to Tesla’s software. “Now only some of its competitors can do that,” he said. “So Tesla was a decade ahead in software updates and the ability to make the vehicle better when it was out of date.”
Being a “pure play” electric car company that works at scale is another advantage Tesla has in the market — in addition to being the only EV maker with a charging network, said Rob Enderle, president and principal analyst at the Enderle Group. An advisory services firm in Bend, Ore.
“Other car companies are ramping up their electric vehicles, but they are facing supply problems due to the pandemic, war and other supply issues,” Enderle told TechNewsWorld.
Chart credit: Statista
Tesla’s charging network is a key element of its offering, maintained Mike Ramsey, vice president and analyst for automotive and smart mobility at Gartner. “Their charging network is a fundamental differentiator between them and other brands selling electric vehicles,” he told TechNewsWorld.
Gruber said vehicle charging is one of Tesla’s notable advantages over its competitors. In JDP’s 2022 charging studies, Tesla received awards for highest satisfaction with Level 2 permanently attached home chargers, public Level 2 charging and DC fast charging.
In the public charging study, Gruber observed that the wide availability of the Tesla charging network, ease of use – especially with the payment/account process – and network reliability helped the network perform well.
Ease of use was also one of the standout metrics for Tesla in the home charging study, he said.
bumpy road ahead
While 2022 has been a good year for Tesla sales, storm clouds may be on the horizon. “Musk’s Twitter escapades, coupled with his move to the political right, have alienated the typical left-leaning Tesla buyer, hurting sales and forcing rebates and other practices to move vehicles.” ,” Enderle maintained.
“Our local Tesla dealer appears to be up to its neck in overstock due to slow sales, suggesting Tesla numbers may be in transition or overpriced,” he said.
“Since Tesla sells through their own stores, there is no third party verification of their sales numbers, and they have been going to promote rapidly declining valuations for some time now,” he explained.
“As FTX showed,” he continued, “oversight on corporations is almost non-existent, which calls into question much of what is reported by every public company, especially those under high stress like Tesla and Twitter. “
The competition is also heating up. “Buyers have an increasing selection of EVs to choose from,” Gruber said.
“The number of products coming from OEMs is growing rapidly,” he continued. “Those products now fill vacancies in popular segments and brands with high loyalty rates, such as the Ford F-150 Lightning and Toyota bZ4X.”
“Competition is increasing, and we’re seeing it in our data,” he said.
Ramsey agreed that competition will be a future challenge for Tesla. “They showed the way for startups like Rivian and Lucid,” he said. “Those guys are going to get stronger and stronger.”
“Meanwhile, traditional car companies are adding more and more electric vehicles to their lineups that are going to be a lot more affordable than Tesla,” he observed.
“New competitors like Lucid and Rivian are causing Tesla pain,” Enderle said. Anecdotally, he notes that two of his neighbors now have Rivian, and one who owns a Tesla is considering a Rivian.
“Plus,” he continued, “better electric vehicle solutions from various carmakers will put more pressure on the company, but the firm’s biggest problem is Musk, and fixing him has proven problematic.”
“They forced Tesla to provide incentives to sell cars, resulting in a massive drop in Tesla’s valuation and Musk’s net worth,” he added. “It has also increased the number of potential Tesla buyers considering alternatives.”
Ramsey pointed out, however, that Tesla’s CEO has long been a mix for the company. “Since the company’s inception, Elon Musk has been key to Tesla’s success and the source of some of its problems,” he said. “He’s gone through periods where he’s had more losses than gains, but it goes in cycles.”