The company led by Elon Musk hit a ceiling a few months ago and has been unable to maintain the pace of production, sales and stock price, largely due to external problems beyond its control. Tesla is facing a losing streak right now.
The tailwind has temporarily stopped blowing, and Tesla has lost momentum. The second quarter has not been the best for the company established in Texas (USA) -initially in California- between one thing and another. The figures are not so goodalthough it remains in a very solid situation and continues to be the undisputed leader in 100% electric cars.
For now, Tesla has a few issues to correct before it can break its previous records. It’s time to pick up a bit of cable and consolidate its industrial, human, financial position, etc. Although many others are much worse off, these are the Five most significant problems that Tesla accumulates in 2022.
Tesla sales in the Chinese market, almost nothing in April and a big slowdown in May
1) Production falls for the first time in several quarters and quality is lacking in Germany
The COVID outbreak in Shanghai, where it has its main factory for export, had to close for 20 days and took a few weeks to recover, so production of about 90,000 cars was lost. On the other hand, logistical problems prevent both the new Giga Austin and Giga Berlin-Brandenburg from reaching the planned production.
There are not only problems of quantity, but also of quality. In the factory in Germany, production has stopped for two weeks to correct quality problems in the Tesla Model Y that involved losing extra time. In addition, they have trouble finding enough qualified workers and have had to offer higher wages.
BYD’s plug-in hybrids and 100% electric ones have allowed the Chinese manufacturer to abandon traditional engines in passenger cars
2) Your leadership position is beginning to be jeopardized
Failing to meet production expectations, Tesla has temporarily lost its title as the top maker of plug-in electric vehicles. In the first half of the year, the Chinese giant BYD sold 638,157 electric and plug-in hybrid cars, while Tesla has sold 564,743 units. Of course, speaking of 100% electric, Tesla is still far ahead of BYD’s 323,519 units.
In the medium term, some analysts believe that large manufacturers such as Ford or General Motors can reach cruising speed and sell more electric vehicles than Tesla, if the planned plans of the “traditional” industry are fulfilled and ranges with more freedom of choice end up managing to overcome Elon Musk’s company share. Eye, also Volkswagen has similar ambitions.
Current Tesla range
3) Supply problems and higher prices
Tesla has managed to avoid many supply problems of vital components for electric cars such as microchips or batteries, not without suffering increases in the price of raw materials or their suppliers. Consequently, have been forced to raise prices several times in a year and a half.
Since January 2021, the Tesla Model 3s have increased in price between 8,000 and 11,000 dollars in the United States, depending on the version, although the Model Y rose in price more, between 10,000 and 16,000 dollars. The minority Model S have risen in price between $16,000 and $25,000, and the Model X even more, from an extra $19,000 to $31,000.
Activity in factories will increase throughout 2022, as Elon Musk predicted a 50% improvement on last year’s volumes
4) The end of teleworking and thousands of layoffs
In June, an internal communication from Tesla was made public in which teleworking was de facto eliminated, since it was only possible to work from home for 40 hours a week in the workplace. Also, announced the dismissal of 10% of the workforce (about 100,000 people at the end of 2021), although in the end “only” it will be 3.5% of staff, but in offices, not in factories.
This ballast shedding maneuver corresponds with a bad feeling from Elon Musk about where the economy is going, which dovetails with warnings from economists that the developed world is headed for an economic recession. The latest economic results will be announced on July 20, and they may not be good.
5) Various punishments in the markets
The sum of all these factors, added to the fact that in 2022 there will be no new models as such, has meant that in the last 52 weeks almost all the gains in the stock market have been neutralized. Tesla has ranged between $620.46 and $1,243.49 per share on the NASDAQ, currently try to get back to the $700 level. Its ceiling was reached in November 2021.
Although it is true that capital is fleeing from companies of all kinds, Tesla has fallen more than the NASDAQ average in 52 weeks and the image persists that it is a very volatile investment that does not yield dividends for holding portfolio positions. But other start-up electric car manufacturers are much worse off, read Rivian, Lucid, etc.