Tesla Stock Could Nosedive As Competitors Multiply

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