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Tesla Stock Could Nosedive As Competitors Multiply

Tesla crash

Tesla’s share price, currently at over US$300 apiece, could nosedive to as little at US$84 by the end of next year as a flurry of competitors crowd the EV market, says Vertical Group analyst Gordon Johnson.

Speaking to CNBC, Johnson said that last year saw the launch of the first fully electric car that can compete with Tesla’s lineup on range—the Chevy Bolt—and this year four more fully electric long-range electric cars are set to hit the market.

Over the next four years, Vertical Group analysts counted a total 101 new electric car models coming to the market, which will change the EV landscape significantly—and Tesla is the one that stands to lose the most from this ramp up of competition.

Yet competition is not the only problem for Elon Musk’s carmaking venture. There is also the issue with too-ambitious production, and sales targets that it consistently falls short of. Johnson noted Tesla’s expectations of a 60-percent increase in sales for the first half of last year, which reality squashed, with actual sales rising by a modest 6 percent.

In production, the analyst noted, things look even worse. Back in 2014, Musk said the company will roll out 60,000 Model Xs in 2015 but only an abysmal 208 were actually produced. While it’s true that since then production has ramped up sufficiently to push total Tesla sales to almost 30,000 in the first quarter of this year, the fact remains that the company keeps on failing to stick to its own deadlines and production targets.

All this has already weighed on Tesla’s share price, and competitors would be more bad news for the cash-burning carmaker. Yet instead of worrying about this, Tesla is forging ahead with the expansion of its lineup: unnamed sources told Reuters today that the company plans to start producing its SUV, the Model Y, in November next year.

By Irina Slav for Oilprice.com

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  • Good.WRITE.Arm on April 12 2018 said:
    EV's make up 1% of the market--consumers don't like them because they can't justify the cost increase. Just look at the big hybrid SUV's GM had to discontinue a few years back because consumers weren't buying them. This so-called EV revolution is a dud in this current economic landscape. Maybe Tesla will make it because it is a tech company and not just a car company and Elon always seems to figure out a way, but, if you expect the GM Bolt to become a household name, well, I will tell you right now that that is never going to happen. Nobody is clamoring for the Chevy Bolt and Americans love their big SUV's--but they aren't willing to pay a significant cost increase just because that big SUV is a hybrid or all electric. Especially when you add in the inconvenience of having to charge it every couple hundred miles. If they got 500 miles per charge, then that could change things, but, that is not the reality right now.
  • Markp1950 on April 12 2018 said:
    As soon as a competitor arrives that has a charging network. GM Bolt is a nice car, but no charging network to go anywhere.
  • Marc Greenberg on April 12 2018 said:
    This writer obviously does not own a Tesla and cant see the huge differences between a Tesla and the Chevy Bolt nor any other EV. How does someone in the oil and gas industry comment on whether an "disruptive" car company will make it or not? Just another dooms day uneducated writer without any first hand experience...... Go buy one or even test drive one, same with the bolt and then write away! These uneducated comments cause stocks to decline unnecessarily. And yes, I am also a Tesla stock owner and a product owner.

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