Tesla’s Rollercoaster Fortunes

Tesla dominated the news cycle this half of the year. CEO Elon Musk’s purchase of social media company Twitter dismayed investors. It sent the company’s already-high stock price into free fall, which reached a two-year low in November.

In China, where Tesla makes one-third of its cars, production from the Shanghai factory was patchy. President Xi Jinping’s zero COVID policy kept the plant closed for weeks on end. The company lowered prices for the Model 3 and Model Y by 9% and threw in an insurance incentives too.

While this upped November sales by 40% from October and by 89.7% year on year, skeptical observers suspect this may indicate the company isn’t meeting year-end targets. The company cut December production numbers by 20% from November.

But in the topsy-turvey world of Tesla, as the company’s value took a hammering, sales dipped and Musk played at being a media mogul, the company launched two new models in Thailand.

Thailand is Asia’s fourth-largest auto assembly hub, and produces 1.5-2 million vehicles annually.

Tesla is not the only game in town. Carmakers in Europe and Southeast Asia are chipping away at Tesla’s market lead. Volkswagen delivered 293,000 EVs in 2022, an increase of 25% year on year, and China’s BYD is working to knock Tesla off its top spot at home. 

Tesla is also getting snubbed by policymakers. The company, along with other U.S. pure battery EV players Lucid and Rivian, weren’t invited to President Joe Biden’s EV White House summit in August. This sent a sign to the upstarts that Detroit and its union workforce are still a force to be reckoned with. Biden’s Bipartisan Infrastructure Law earmarked U.S. $7.5 billion for a national network of 500,000 chargers, $7 billion to domestic battery manufacturing and $10 billion for clean transit and school buses.

While China and the U.S. used the carrot to entice drivers to go electric and OEMs to develop their fleets, the Europeans wielded the stick. In November, lawmakers in the European Union agreed on the de facto ban of internal combustion engine vehicles by 2035. At the same time, Brussels proposed the new Euro 7 emissions standards. The ICE in continental Europe is all but finished.

Europe’s carmakers hardly need the encouragement. Volkswagen Group, Volvo, BMW, Mercedes, Renault, Fiat and Citroen are all charging on with their fleet electrification plans.

Also of note, Johnny-come-lately Toyota announced five new BEVs for Europe as it targets 50% EV sales by 2030. TheJapanese carmaker had until recently buried its head in the sand, unlike Nissan and Honda. Dubbed China’s Tesla, Nio launched in Denmark, Germany, the Netherlands and Sweden. Ford retired the Fiesta to concentrate on EVs in Europe and began sales of the electric Transit, made in Turkey. Also in Turkey, the Togg SUV rolled off the production line. It’s not only the country’s first homegrown EV but also its first homegrown vehicle of any kind, they say.

Suffice to say, passenger car motor oil blenders may not be as thrilled with these developments as President Biden, who said: “Look, the future of the auto industry is electric. There’s no turning back.”