The electric vehicle market is going through tough times not only in China, but since it is the largest in the world in this region, it most clearly illustrates the competition between manufacturers. At the end of last year, Tesla lost the title of the world's largest electric vehicle manufacturer to the Chinese BYD, and this week it fell out of the top ten most valuable companies in the S&P 500 index.
According to Barron's, Tesla shares lost value for three days in a row, falling 13% in total. A sharper three-day decline was observed only in October last year (16.8%). At the current level of capitalization, Tesla with its $553 billion is cheaper than Visa ($563 billion), so the latter company displaces it from tenth place in the ranking of the most valuable companies in the S&P 500 index. This is happening for the first time since January 2023, when Tesla was just preparing to get into the top ten .
Analysts at Morgan Stanley believe Tesla's lineup is too outdated to successfully compete with the same Chinese electric vehicles on a global scale, and the Chinese market is now experiencing an oversupply. Global demand for electric vehicles continues to decline even as prices fall, and the competitive threat from hybrids is greater than previously thought. As a result, analysts say, Tesla is unlikely to deliver more than 2 million electric vehicles this year, which would be progress compared to last year's 1.8 million vehicles, but too little to maintain the pace of business development planned by Elon Musk until 2030. . The situation is aggravated by problems with the rhythmic production of Tesla electric vehicles in California and Berlin, so one cannot expect phenomenal commercial success from the company in the near future. Tesla's operating profit margin fell to 9% last year from 17% a year earlier, and the company is taking even more risks this year.
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