Tesla's Market Share 'Decimated,' Backlog Has 'Collapsed To Nothing' — Why Institutional Investors Are 'Very Concerned'

Even though shares of Tesla have kicked off 2023 on an upswing, the stock remains well below its all-time high. Those betting against the EV maker include a notorious Tesla bear who's been digging his claws deeper into the Elon Musk-led company, scavenging for weakness. 

What To Know: GLJ Research's Gordon Johnson took swipes at Tesla on Dec. 20 as the automaker's stock was on its way to falling 65% in 2022. 

Although most think the weakness in Tesla shares is a direct result of Musk's Twitter takeover, Johnson believes it's fundamental. 

"It's just a car company that has built too much capacity they can't sell," Johnson said on CNBC's "Squawk Box."

"You are talking about a company engaging in margin-slashing price cuts."

Tesla has issued five price cuts in China in the current quarter alone, yet the company is unable to meet sales expectations, Johnson said, highlighting weak sales numbers out of China.

That explains the recent declines in Tesla shares, he said. 

Check This Out: Tesla Continues To Break Down From This Bearish Pattern, Here's Why A Bounce Is On The Horizon

"Institutional investors are simply ... looking at this data and I think they are becoming very concerned because if you look to next year, they are running down their backlog. Their backlog in China has collapsed to nothing," Johnson said.

He told CNBC that Tesla isn't able to sell all of the cars it can make, contrary to popular belief. In both the second and third quarters, Tesla produced more cars than it sold, he stressed, adding it's on pace to do so again.

"When you see the Q4 delivery numbers and you see, more importantly, the Q1 delivery numbers, I think the stock is going to come under tremendous pressure," Johnson said.

"Backlog down, margin-slashing price cuts, yet they can't sell out their capacity. That's a big problem for a company valued for tremendous growth."

On top of all of this, competitors are eating Tesla's lunch in markets outside the U.S. BYD CO BYDDY currently sells more cars in China than Tesla, while Volkswagen AG VWAGY sells more vehicles than Tesla in Europe, Johnson said.

"Whenever competitors come in, Tesla's market share gets decimated," he added. 

See Also: Who Could Be The Next Twitter CEO After Elon Musk? A Look At 7 Potential Candidates

Originally published on Dec. 20, 2022

Photo: courtesy of Tesla.