Tesla, Inc. TSLA will continue to rule the U.S. electric vehicle market, according to tech venture capitalist Gene Munster.
What Happened: Munster, co-founder of Deepwater Asset Management, asserted that recent data from Cox Automotive, indicating Tesla’s 51% market share in the December quarter, solidifies his prediction for the company’s continued success in the U.S. EV market throughout 2024.
Predictions of Tesla losing EV market share are ill-founded, according to Munster.
“Most investors believe Tesla will lose around 10% share in 2024 given new competitive models are growing faster off a smaller base, making it difficult for Tesla to maintain share,” he said.
“I believe the decision by 4 of the top 6 traditional automakers in 2023 to slow their investment in EVs will come back to haunt them in the form of lost long-term EV market share,” Munster added.
See Also: Best Electric Vehicle Stocks
Why It Matters: Munster’s comments come amid lukewarm sentiment among Tesla investors since mid-2023, driven by fears of a demand slump attributed to economic uncertainty, the absence of a budget EV model, and a slowdown in EV adoption. In response, Tesla proactively reduced prices to bolster sales volume, causing a contraction in margins, particularly in the core auto margin.
Tesla’s launch of the new Model 3 EV in North America on Wednesday and the anticipation of a sub-$30,000 car in late 2024 or the first half of 2025 have provided optimism to investors and Tesla enthusiasts.
Kelley Blue Book, a subsidiary of Cox Automotive, reported Tesla’s 2023 U.S. sales at 654,888 units, capturing a 55% market share. With global deliveries totaling 1,808,581 units, Tesla’s U.S. sales represented 36.21% of its overall volume.
Looking ahead, Tesla is scheduled to release its fourth-quarter results on January 24, 2024, with a focus on quarterly gross margin and delivery guidance as potential catalysts that could impact the stock.
In contrast, traditional automakers like Ford Motor Co. F and General Motors GM have announced delays and slowdowns in their EV plans, citing buyer reluctance and union strikes as contributing factors.
As of Wednesday’s session, Tesla’s stock closed down 0.43% at $233.94, marking a decline in six out of seven sessions in January and a total decrease of about 6% for the month so far, according to data from Benzinga Pro.
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