Fact: Elon Musk
Elon Musk, son of engineer Errol Musk and model Maye Musk, was born in South Africa in 1971. As a teenager, he moved to Canada, and then on to the United States.
His entrepreneurial career began with the company X.com, which later became Paypal. Paypal was sold to Ebay in 2000. Musk, who was the company’s single largest owner, became a billionaire.
In 2002 he founded the space company Space X and a year later the electric car company Tesla.
Elon Musk was previously ranked as the world’s richest man with a fortune of over $260 billion. According to the magazine Forbes, he was pushed down from the first place last year after his Tesla shares lost a lot in value.
In 2022, Musk bought the social media platform Twitter for the equivalent of almost SEK 500 billion. The deal and Musk’s actions as Twitter CEO attracted a lot of attention during the year.
Last year was the worst for Tesla on the stock market since the listing in 2010. Since the peak in November 2021, the value of the company has decreased by 900 billion dollars, according to Bloomberg.
The big race has hit hard against many because the stock is a favorite of small savers, but also against the company’s CEO Elon Musk, who has had to sell shares in the company to finance his expensive Twitter purchase.
Tesla CEO Elon Musk on Halloween. Archive image.
The company’s latest report was disappointing. Tesla missed analysts’ expectations for the number of cars delivered for the third quarter in a row.
It may sound bleak, but compared to other car manufacturers, despite the crash, Tesla is still highly valued. At the turn of the year, the market value was 389 billion dollars, corresponding to around 4,000 billion kroner.
That makes the electric car maker bigger than Toyota, General Motors, Stellantis and Ford – combined, according to Bloomberg.
By comparison, Volvo Cars has a market capitalization of close to SEK 150 billion.
Driven the entire car market forward
— Tesla has had better growth and a higher margin than other car manufacturers. It is a fantastic company that has driven the entire car market forward, so perhaps the high valuation is justified, says Johan Nilke, tech manager at Lannebo Fonder.
But the valuation is also high compared to tech companies, which is more difficult to justify, according to Johan Nilke.
— Even if the share doesn’t look as expensive anymore, the price is based on them continuing to deliver growth, that’s where the uncertainty is. The company has underperformed in the last three quarters, he says.
More clouds of worry are gathering around the corner. Recession, continued problems with deliveries and more expensive batteries are some.
But even Elon Musk himself, and his focus on Twitter, has been raised as a problem by several analysts and owners during the year.
— He is trying to sort out Twitter and has sold shares in Tesla for over SEK 40 billion since 2021. There may be a continued need for funding in Twitter, but SpaceX also has a need for funding, says Johan Nilke and continues:
— Musk has been a huge advantage when it comes to boosting the company, but it will be difficult for a stock with such an erratic person in management, the question is how long other owners and the board will be patient with it, and what it will cost.
Tesla is still the undisputed number one when it comes to sales of pure electric cars in the world. But competition is increasing, both from pure electric car manufacturers but also from traditional car manufacturers such as BMW.
“Didn’t do anything to the design”
When BMW recently released new figures, it appeared that the company sold 2.4 million vehicles in total in 2022, of which 10 percent were fully electric. During 2023, the company must increase that share to 15 percent, according to Reuters.
— We see that other car brands are releasing electric cars that are catching on and becoming popular. To be completely honest, Tesla hasn’t done anything to their design since they started almost 20 years ago, the other car manufacturers have an advantage in that they are used to releasing new models and designs, says Johan Nilke.
According to Forbes, Tesla’s share of the American electric car market has gone from 79.4 percent during the period January–September 2020, to 65.4 percent during the same period in 2022.
The question is whether the approaching recession will further affect Tesla’s market share.
According to Nicklas Andersson, savings economist at Avanza, Tesla can be affected by people holding tighter in their wallets. Earlier this week, the company also announced a price reduction.
— The market is talking about logistical challenges, but also about demand. There is no getting away from the fact that these are quite expensive cars, he says.
But at the same time, the market is growing rapidly.
— I am fully convinced that Tesla’s market share will drop when the competitors get wind in their sails and ramp up production. That doesn’t mean a smaller pie for Tesla, but a smaller piece of a bigger pie. The proportion of electric cars globally is still vanishingly low, says Nicklas Andersson.