For the first time, Tesla’s share of the electric vehicle market has fallen to less than 50% in a quarter. But investors don’t seem to mind much.
Tesla’s U.S. sales declined by 6.3% during the second quarter of 2024, even as rivals like General Motors and Hyundai Motor saw their EV sales grow, propelling the industry to a record 330,463 units sold, according to Cox Automotive. Electric vehicles as a whole accounted for 8% of total auto sales between April and June, up from 7.2% in 2023.
Due to the heightened competition and, likely, Elon Musk’s controversies, the Austin, Texas-based automaker’s share of the market fell to 49.6%.
“While Tesla’s sales continue to decline, with its share of EV sales now below 50% for the first time, the overall electric vehicle competitive landscape intensifies further,” Cox Automotive Director of Industry Insights Stephanie Valdez Streaty said in a statement Tuesday. “This is leading to continued price pressure, helping push EV adoption slowly higher.”
Streaty noted that automakers that can deliver EVs “at the right price” and offer a positive experience to consumers will be able to grow their sales faster. Several EV makers, from Tesla to Lucid to Ford Motor, have introduced new incentives — like ultra-low interest rates — or price cuts in recent months to boost sales.
Overall, Tesla’s second-quarter sales came out to just shy of 444,000, beating Wall Street’s lowered expectations and issuing a renewed interest in the stock. Over the past month, the stock has gained more than 50%, propelled forward by the sales beat and shareholders’ re-approval of Musk’s $56 billion pay package, which is being debated in Delaware state court.
Plus, Tesla bulls like Ark Investment Management and Stifel Nicolaus have demonstrated their strong support for the stock, with the latter firm initiating coverage last month with a $265 price target, citing the potential of robotaxis and the Optimus robots. Goldman Sachs analyst Mark Delaney raised the firm’s price target to $248 per share from $175 per share Wednesday, while maintaining a neutral position, citing Tesla’s potential for driverless vehicles.
That’s helped reverse months of the stock’s decline. The automaker struggled in the beginning of 2024, reporting poor first-quarter sales followed by mass layoffs worldwide. Its stock price plummeted to a low of about $139 in April. Now, it’s trading at $263 per share after 10 days in a row of gains.
“In a nutshell, the worst is in the rear view mirror for Tesla as we believe the EV demand story is starting to return to the disruptive tech stalwart ahead of a historical Robotaxi Day on August 8th,” Wedbush Securities analyst Dan Ives wrote in a note last week.