Major Luxury Auto Makers EVs Coming to ‘Kill’ Tesla (NASDAQ:TSLA)

Major Luxury Auto Makers EVs Coming to ‘Kill’ Tesla (NASDAQ:TSLA)

Major Luxury  Auto Makers EVs Coming to ‘Kill’ Tesla (NASDAQ:TSLA)

$TSLA

A wave of Tesla killers is about to roll off the production lines of premium European carmakers including Jaguar, Audi, Mercedes-Benz and BMW, starting now.

Count it as another headache for Tesla (NASDAQ:TSLA) CEO Elon Musk, whose tweets about taking the company private are reportedly under review by the Securities and Exchange Commission.

To date, Tesla has ruled the road for electric car buyers, with little direct competition in the market from $60,000 and up.

Those days are over: Jaguar is already delivering its I-Pace all-electric SUV, with comparable entry-level prices to the Model S sedan and Model X SUV. The new Jaguar comes with a pedigree of luxury, racing and engineering prowess. In some markets the wait list is now a year long.

Autocar UK took a direct comparison of the Tesla Model S sedan and the new Jaguar. The result was about what many had expected.

“The I-Pace provides a more appealing space in which to pass the time, and a far more engaging driving experience on the way,” the reviewer wrote.  The Tesla is “still impressively capable given its age, but quality is variable and chassis not close to the standard now set by Jaguar.”

The new rivals are behind some softness that Tesla has experienced in Europe.

Sales in all major markets there that do not offer significant rebates slid during 1-H of the year, data from forecaster IHS Markit show. The drop was as much as 30% in Germany and the UK, the IHS data show. Tesla does not report pan-European sales numbers, although the IHS estimates are consistent with delivery data kept with national governments. Norway customers are in revolt after waiting for months to get spare parts and repairs.

“Growth in sales for Tesla in markets like Norway and the Netherlands remains incentive led,” said an analyst at forecaster IHS Markit. “In the UK and Germany, early adopters have adopted and are already looking at the next shiny thing.”

Tesla disputes the IHS and government data and says total sales are rising in Europe, while declining to provide any market-by-market details.

“The data from both IHS and regional transportation departments is not reflective of actual sales data,” Tesla said. New-car registrations cannot be relied on to track actual vehicle sales, Tesla said.

Increasing competition complicates Mr. Musk’s quest to transform his unprofitable juggernaut into a viable market leader. The company’s M3 is still partially made in a tent, raising questions about the sustainability of ambitious output targets and criticisms over poor quality.

The debate about newly introduced models from competitors and Tesla’s recent problems on production and delivery is going to be even louder in the future.

Overall, sales for the Model S and Model X is slowing, though the company says demand is high and battery-cell supplies have constrained deliveries.

The company forecasts 100,000 sales of the 2 models this year, compared with about 101,000 in Y 2017, when sales jumped 33%. Tesla’s response to increased competition and an aging Model S is the Model Y, an electric crossover due to be introduced later this year or early in Y 2019.

Mr. Musk’s problem with his latest car is Supply.

Tesla has taken hundreds thousands of deposits for its M3 sedan, and an order book that grows as more M3s reach driveways across America. The M3 is not available outside the US now.

“The sales and demand trends, it’s looking really positive,” Mr. Musk told analysts after reporting Q-2 results and predicting that its string of losses would soon end.

Tesla’s future is now unknown after Mr. Musk Tweeted on 7 August that he was considering taking the company private in a $82-B deal, a disclosure that seemed to catch the company off guard and created a new distraction for the board.

The SEC is investigating Mr. Musk’s claim that he had funding secured for the ‘420’ deal.

HeffX-LTN Analysis for TSLA: Overall Short Intermediate Long
Neutral (0.08) Neutral (0.07) Neutral (0.15) Neutral (0.03)

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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