NEW YORK (AFP) – Tesla lost a staggering two-thirds of its market value in 2022, a victim of fears about the demand for electric vehicles (EVs), dismay at Elon Musk’s tribulations as head of Twitter and the end of easy money on Wall Street.
On paper, everything was going well for the iconic electric vehicle maker that overcame supply problems and made nearly USD9 billion in profit in the first three quarters of the year despite soaring costs.
But this is slower than the furious pace of growth that Chief Executive Officer (CEO) Musk demands of his company with his stated ambition that Tesla unseat Apple as the world’s most valued company.
Even if the share price is subject “to a lot of emotional elements… Tesla will be by my best guess the most valuable company in the world in less than five years”, a defiant Musk told a forum on Twitter this month.
Blaming problems on “macroeconomic conditions” and high-interest rates, Musk said he “can’t say enough good things” about Tesla, asking his listeners to ignore his misadventures at Twitter where the mercurial CEO has captured headlines since taking over in October.
But to some analysts, the problems at Tesla are more serious and unrelated to Twitter – mainly because the days when it was the sole player in the electric vehicle market are over.
The new year “is shaping up to be a ‘reset’ year for the EV market” with supply flooding the market, analyst Adam Jonas of Morgan Stanley said in a note. “There are hurdles to overcome,” added Jonas – citing increasing competition and a worsening economy, with living costs sent soaring by inflation.
In 2023, the quiet hum of EV motors will be coming from vehicles other than Teslas as traditional automakers roll out models at an unprecedented pace.