Tesla Stock Forecast: Q3 Market Share Slips Despite Price Cuts

Electric vehicle (EV) sales in the United States have hit unprecedented heights in the third quarter of 2023. Sales surged by a remarkable 50% year-over-year to reach 313,086 units, according to data sourced from Kelley Blue Book by Cox Automotive. Although the overall U.S. EV market soared above 300,000 units for the first time during Q3, Tesla (TSLA:NSD) witnessed declining market share, despite reducing prices, as rivals intensified their presence. This article will highlight the impact of increased competition on Tesla stock forecast.

 U.S. Market Share Declines:

During the period, Tesla experienced a 19.5% increase in sales, achieving 156,621 vehicles sold. However, Tesla’s market share receded to 50% in Q3 of 2023, down from 59.3% in Q2 and 62.4% in Q1. While Tesla continues to dominate the U.S. EV market, other contenders are progressively expanding their EV footprint and gaining momentum.

Ford’s Market Share Growth

Ford (F:NYE) boosted its U.S. EV market share to 6.7% in Q3 2023, up from 5% in the preceding quarter. Despite facing a substantial UAW union strike, Ford witnessed a 14.8% growth in Q3 EV sales, totaling 20,962 units, securing the second position in the domestic EV market. Simultaneously, Rivian’s EV market share climbed to 5% from 4.3%, and Hyundai’s market share elevated to 6.3% from 4.4% in the second quarter of 2023.

German Luxury Auto Brands Accelerate U.S. EV Sales Growth:

Additionally, Cox Automotive highlighted the swift surge in U.S. EV sales from German luxury automakers, Audi, BMW (BMWYY:OTC), and Mercedes (MBGAF:OTC). In particular, Q3 EV sales for BMW and Mercedes skyrocketed by nearly 200% and 284%, respectively, while Audi’s EV sales grew by approximately 94%.

Cautious Outlook for Cybertruck Amid Delays:

Cox Automotive anticipates that Tesla’s long-awaited Cybertruck might reverse the declining market share trend. However, it cautions that fierce competition from Ford, Rivian (RIVN:NSD), and General Motors’ (GM:NYE) Chevrolet could potentially impact Cybertruck’s sales volume. Earlier this year, Tesla CEO Elon Musk had promised a “great delivery event” for the Cybertruck in the third quarter, but no such event materialized, indicating further delays in Cybertruck deliveries.

Tesla’s Q3: Challenges and BYD’s China Success:

In the third quarter, Tesla reported a sequential decline in its production and deliveries, which was attributed to planned factory upgrades. Furthermore, Tesla’s sales of China-made EVs declined in September. Meanwhile, rival BYD (BYDDY:OTC) continues to shine and grow rapidly in China, which is the world’s largest EV market.

Tesla Stock Forecast:

Based on Tesla stock forecasts from 29 analysts, the average target price is $247.03. The average rating is “Buy.” Stock Target Advisor’s analysts are”Slightly Bullish.” This analysis is based on nine positive and four negative signals.

Current Performance:

In the most recent closing, the stock price stood at $258.87, marking a -0.45% change over the past week, a -3.22% decrease over the last month, and an impressive +19.16% surge over the past year.

Conclusion:

As Tesla navigates a shifting landscape in the U.S. EV market, increased competition and delays in product launches will test the company’s resilience and innovation. Investors will be closely watching how Tesla adapts to these challenges while maintaining its leadership position.

Maryam Nasir