Benzinga - by Shanthi Rexaline, Benzinga Editor.
Tesla, Inc. (NASDAQ:TSLA) will continue to rule the U.S. electric vehicle market, according to tech venture capitalist Gene Munster.
What Happened: Munster, co-founder of Deepwater Asset Management, asserted that recent data from Cox Automotive, indicating Tesla’s 51% market share in the December quarter, solidifies his prediction for the company’s continued success in the U.S. EV market throughout 2024.
Predictions of Tesla losing EV market share are ill-founded, according to Munster.
“Most investors believe Tesla will lose around 10% share in 2024 given new competitive models are growing faster off a smaller base, making it difficult for Tesla to maintain share,” he said.
“I believe the decision by 4 of the top 6 traditional automakers in 2023 to slow their investment in EVs will come back to haunt them in the form of lost long-term EV market share,” Munster added.
I believe the decision by 4 of the top 6 traditional automakers in 2023 to slow their investment in EV's will come back to haunt them in the form of lost long-term EV market share.— Gene Munster (@munster_gene) January 10, 2024
Why It Matters: Munster’s comments come amid lukewarm sentiment among Tesla investors since mid-2023, driven by fears of a demand slump attributed to economic uncertainty, the absence of a budget EV model, and a slowdown in EV adoption. In response, Tesla proactively reduced prices to bolster sales volume, causing a contraction in margins, particularly in the core auto margin.
Tesla’s launch of the new Model 3 EV in North America on Wednesday and the anticipation of a sub-$30,000 car in late 2024 or the first half of 2025 have provided optimism to investors and Tesla enthusiasts.
Kelley Blue Book, a subsidiary of Cox Automotive, reported Tesla’s 2023 U.S. sales at 654,888 units, capturing a 55% market share. With global deliveries totaling 1,808,581 units, Tesla’s U.S. sales represented 36.21% of its overall volume.
Looking ahead, Tesla is scheduled to release its fourth-quarter results on January 24, 2024, with a focus on quarterly gross margin and delivery guidance as potential catalysts that could impact the stock.
In contrast, traditional automakers like Ford Motor Co. (NYSE:F) and General Motors (NYSE:GM) have announced delays and slowdowns in their EV plans, citing buyer reluctance and union strikes as contributing factors.
As of Wednesday’s session, Tesla’s stock closed down 0.43% at $233.94, marking a decline in six out of seven sessions in January and a total decrease of about 6% for the month so far, according to data from Benzinga Pro.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Read Next: No Threat From Traditional Autos, But Tesla Should Be Concerned About Chinese Rivals And This FAANG Giant: Munster
Photo via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.