Tesla and Stellantis – Both in crisis, but for different reasons

Elon Musk's Tesla: Visions without tangible progress
 
Tesla founder Elon Musk is increasingly disappointing with his strategic direction. Initially, he was able to set himself apart from the competition by reducing the price of his electric cars, but cost reduction alone is no longer enough to meet the high expectations of the company. Musk's robotaxi event, at which he presented autonomous taxis and humanoid robots like ‘Optimus’, left a bad taste in the mouth. While the vision of autonomous driving and robots as everyday helpers sounds great, in reality there are still considerable doubts about its feasibility. According to a report by Bloomberg, the robots were said to be remotely controlled at the presentation, which calls the credibility of the project into question.
 
The stock market is reacting with increasing scepticism as Tesla's former technological advantage is no longer clearly visible. The market capitalisation, which remains very high, is increasingly difficult to justify. Tesla's autonomous driving technology is still not market-ready, and Musk's promises that ‘Optimus’ could become the greatest product ever seem increasingly unrealistic to many analysts and investors. In addition, Tesla is coming under increasing competitive pressure as both traditional automakers and emerging Chinese companies are catching up in various areas.
 
Unfortunately, these problems are also reflected in Tesla's stock chart. The stock has already experienced a very strong correction in the period from November 2021 to January 2023, dropping from an all-time high of $414.50 to $101.20.
 
The rise from the low of $101.20 initially appeared very promising. The stock was able to recover to $299.29. But then the chart problem occurred:
 

 
You can philosophise for hours about whether chart technique is useful or not. We have been achieving outstanding results with it for years. And maybe we can prevent one or two people from making the wrong decision.
Tesla had the chance to form a very nice multi-part upward impulse structure since the low at $101.20. Unfortunately, however, the stock fell below the low marked with a [B] at the last low (marked in the chart by [A] on the beige arrow) at $138.80, technically breaking the upward trend.
 
This means that Tesla is still likely to be in the big correction wave (II), whose target we see in the range of the purple box at $88.70 to $46.84. The stock can reach this target in two ways: either directly or via a detour upwards. It could well be that Tesla saves itself to or even above the previous all-time high and only collapses afterwards.
 
We prefer the direct route. Then the drama would be over faster and Tesla could really break free and move up again. However, it is to be feared that we will first see an extreme bull trap, which is our alternative.
 
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Carlos Tavares and Stellantis (LON:0QXR): Optimising costs at the expense of the future
 
While Musk is criticised for exaggerated visions, Carlos Tavares, CEO of Stellantis, faces a different problem: he has focused too much on cost reduction and profit optimisation, but neglected the company's future viability. Tavares' strategy of maximising short-term profits has led him to miss out on important future trends. This is now backfiring, particularly in the US market, where customers, especially for the Jeep brand, are no longer on board. The result was a profit warning that led to a significant drop in the share price.
 
Tavares, once considered a star manager, now faces the possible end of his career. His lack of innovation and lack of investment in future-oriented technologies such as electric cars or autonomous driving make Stellantis look old compared to competitors.
 
Shared challenges. Transformation of the automotive industry
 
Both companies are emblematic of the profound challenges the auto industry is currently facing. While Tesla has visionary plans but is unable to implement them in time, Stellantis suffers from an excessive fixation on short-term profits and a lack of a forward-looking strategy. Both approaches are causing the companies' market position to deteriorate and their share prices to come under pressure.
 
All in all, it is clear that the automotive industry is being shaken up by the transformation that is often harmlessly referred to as ‘change’. Companies not only have to optimise their traditional production methods, but also develop future technologies at the same time – a challenge that both Tesla and Stellantis are currently failing at.
 
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