View of the sign “Tesla Straße 1” in front of the Tesla factory construction site. Tesla boss Musk visits the construction site of his electric car factory.
Jorg Carstensen | photo alliance | Getty Images
Tesla has gained ground in Europe, with its Model 3 now just the fourth best-selling pure electric vehicle (EV) on the continent, according to recent statistics.
The European EV market is now the largest in the world in terms of sales, after a surge in 2020 accompanied by a slump in China. The share of new car registrations that is electric is twice that of China and five times that of the US.
In a note Wednesday, Peter Garnry, Head of Equity Strategy at Saxo Bank, said Tesla’s lead by Renault, Volkswagen and Hyundai should have “alarmed” shareholders in recent months.
“Tesla will be successful and become one of the largest automakers in the future, but competition is increasing and that calls into question the market value of $ 805 billion,” Garnry said.
Tesla’s stock is up more than 21% in the first two weeks of 2021 and is up more than 700% in 2020.
Garnry noted that November’s European Vehicle Registration figures showed that plug-ins, a combination of pure electric and hybrid vehicles, were up 198% year-over-year, while the total number of car registrations across the continent was up 14% has fallen.
Plug-in vehicles now account for about 10% of the total market share in Europe, with pure electric vehicles accounting for about 5.4%.
Garnry said customers had claimed that Tesla sales are typically stronger in the last month of the quarter, but stressed that sales fell in both October and November.
In the latest EV ranking, the Renault Zoe retained first place, closely followed by the VW ID.3, according to sales figures from the plug-in vehicle market database EV Volumes. Hyundai’s Kona came in third, ahead of the Tesla Model 3.
“While this should worry Tesla shareholders, it is even more striking that the Model S and X are not in the top 20, despite direct competing models such as Audi e-tron being on the list,” added Garnry.
Tesla was not immediately available for comment when contacted by CNBC.
On Thursday, Renault’s new CEO Luca de Meo announced that the French automaker would move to a more electric line-up, along with building a battery factory in France with one of its suppliers.
“We’re going from a car company that works with technology to a technology company that works with cars,” said de Meo.
China demands the ‘heart and lungs’
Tesla’s stock is currently changing hands at $ 845 a share, and in a note on Thursday, US investment firm Wedbush Securities raised its price target from $ 715 to $ 950 a share, with a bullish case scenario of $ 1,250.
Wedbush cited a surge in demand for electric vehicles and Model 3 from China, which it described as the “heart and lungs” of the Tesla stock ownership case.
“While more than 150 automakers worldwide are aggressively seeking the EV opportunity, in the EV marketplace, we believe it is Tesla’s world and everyone else is paying rent,” said Wedbush analysts Daniel Ives and Strecker Backe in the note.
They predicted that by 2022, more than 40% of Tesla’s total delivery revenue will come from China, while the Democrats controlling all three branches of the U.S. government will provide a substantial boost to EVs in a broader sense, given the president-elect’s climate agenda Joe Biden.
“We believe the growth story in China is worth at least $ 100 per share in a bull case for Tesla as this EV penetration will increase significantly over the next 12 to 18 months, along with major battery innovations emerging from Giga 3 come (Tesla’s Shanghai factory), ”they said.