The surging demand for electric vehicles (EVs) has attracted fierce competition from rival automakers, presenting Tesla with its most significant challenge in the next two years.
This comes at a time when CEO Elon Musk, the world’s richest man, appears to be preoccupied with a range of high-profile ventures, including social media, space travel and artificial intelligence (AI).
This conclusion is drawn from the insights provided by respondents in the recent Markets Live Pulse survey. Among the 630 global contributors to MLIV Pulse, 54% expressed concerns over the intensifying industry competition, recognizing it as a major risk for Tesla.
Also, 26% of the respondents identified Elon Musk’s behavior and decision-making as a key concern for the company’s shareholders.
“Musk is just such an unpredictable person, that I would count it among one of the top risks for Tesla,” Bloomberg quoted Matthew Tuttle, chief executive officer of Tuttle Capital Management, as saying in an interview.
A recent survey revealed that 67% of participants believe that Elon Musk should prioritise focusing on Tesla, with profit margins facing pressure. This cautionary sentiment emerges amid the backdrop of an astonishing 128% surge in Tesla’s stock this year, driven by renewed investor interest in the technology sector and Musk’s optimistic vision of a future dominated by fully autonomous vehicles.
Tesla’s substantial market valuation, despite currently holding a significant lead over both established automakers and emerging startups, is largely contingent on the assumption that it can sustain its competitive edge as electric vehicles become more prevalent in the market.
As competition intensifies and EV adoption increases, the pressure to maintain dominance in the industry becomes even more critical for Tesla’s continued success.
Yet Tesla rivals are picking up the pace. Just earlier in July, China’s BYD Co. set a sales record for the second quarter and delivered 352,163 fully electric vehicles. That shows how rapidly it has gained ground on Tesla, which handed over 466,140 EVs to customers worldwide — also an all-time high.
(With Bloomberg inputs)
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Updated: 17 Jul 2023, 07:12 AM IST