Market Analysis

In every region, Tesla's market share has decreased for both EVs and xEVs: Bernstein

Amos Simanungkalit · 16 Aug17.9K Views

According to Bernstein analysts, Tesla (NASDAQ: TSLA) has been losing market share across all regions and segments within the electric vehicle (EV) and extended electric vehicle (xEV) categories.

The analysts report a steady decline in Tesla's share of the global xEV market, dropping from 17.5% in 2019 to 12% in the first half of 2024. The company's market share in the battery electric vehicle (BEV) sector has also sharply decreased, falling from 28% in 2019 to 20% in 2024.

The decline is especially pronounced in North America, where Tesla held a commanding 77% of the BEV market in 2019. By the first half of 2024, this share had plummeted to 48%.

Bernstein analysts believe that Tesla will struggle to regain market share or achieve substantial growth until it introduces new, lower-priced models, expected around 2026 and 2027. They also suggest that Tesla’s current valuation seems increasingly disconnected from its fundamental performance.

The analysts note that Tesla has been challenging to predict in the short term, a situation compounded by uncertainty surrounding the company's upcoming Robotaxi announcement in October. They express skepticism about the company's success in autonomous driving, pointing out that Tesla has a track record of presenting concepts that are years away from realization.

"Given this history, we suspect that the Robotaxi announcement might be more about vision than actual deliverable product, potentially leading to a 'sell-the-news' reaction," the analysts said.

They argue that while Tesla could be a tough short position leading up to the announcement, the stock is currently trading at over 80 times their 2025 earnings per share estimates. They view the long-term risk-reward profile as unfavorable and maintain an Underperform rating with a $120 price target.

The increasing competition in the EV market and a nearly 10% to 20% year-over-year drop in Tesla’s average selling prices (ASPs) are contributing to the company's loss of market share. Bernstein also highlights that while the global xEV market grew by 21% year-over-year in the first half of 2024, BEV sales saw only a 9% increase, a significant slowdown compared to previous years. In contrast, Plug-in Hybrid Electric Vehicle (PHEV) sales surged by 49% during the same period.