Capital Economy, Business and Finance
Tesla shares fell 9 per cent earlier this month after a robotaxi launch included uncertain promises on delivery. Strong third quarter results last week led to a 22 per cent jump, thanks to profit increases and Elon Musk’s forecast of new models in 2025 boosting sales by 30 per cent. Is the company actually sound? Sort of. Profits were driven not by sales of vehicles, but by selling regulatory credits to other carmakers that failed to meet EV quotas and buy the credits to meet emissions regulations. Tesla is still the largest EV manufacturer in the US, but market share has slipped from around 75 per cent in 2022 to less than 50 per cent now. Globally, China’s BYD is ahead with 24 per cent of the market to Tesla’s 10 per cent. And China is the market right now. In September global EV sales climbed 30 per cent to hit 1.7 million. Sales in China accounted for 1.1 million, against 150,000 in the US and Canada combined.
Elon Musk is trying to rebrand Tesla as an AI and robotics company but has yet to lay out a detailed business plan.
“The days were good when Elon slept at the factory. He was there every day, working. Not going on Trump rallies,” says Tesla investor Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management.
Trump-boosting day traders are backing Tesla like they back Truth Social, which has soared this month despite no profits and insignificant users or advertisers. Tesla, Trump and Musk ride or die together. But EVs are doing fine.
