Did Musk bet too high ?: Dudenhöffer: "Tesla is stuck in the growth trap"

Did Musk bet too high?
Dudenhöffer: "Tesla is caught in the growth trap"

By Diana Dittmer

With the factory in Grünheide, Elon Musk is massively increasing the capacities of his e-car manufacturer. Auto expert Dudenhöffer warns: There are too many e-cars and too few buyers. "Market shares are dwindling and profits are thin". In some markets, Tesla is "practically no longer available".

Tesla is known for pushing the gas massively when it comes to growth. What was a recipe for success for a long time could now take revenge. Because while the production capacities of the e-car manufacturer continue to grow rapidly, market shares and sales figures have shrunk. Tesla has long since reached its limits of growth, writes industry specialist Ferdinand Dudenhöffer from the CAR Institute in Duisburg.

When Tesla starts production in the new factory in Grünheide, Brandenburg, 500,000 vehicles can roll off the assembly line here in the first expansion stage. Worldwide this results in a production capacity of more than 1.5 million electric cars for the coming year.

Will these cars also find buyers? Dudenhöffer doubts that. According to his study, Tesla production was not fully utilized by 2020, so only just under 500,000 Teslas were delivered last year. The capacity utilization was therefore only 50 percent. A utilization of less than 85 percent is associated with significant losses. The industry expert is convinced that Tesla is paying for the high rate of growth with expensive excess capacities. It is a situation "with which you get more than just gray hair in the auto business".

In fact, the situation could be much worse. For Dudenhöffer this suggests the monthly statistics. The industry expert sees clear indications that sales were strongly pushed in December 2020 in order to reach almost 500,000 sales in 2020. In the eight major e-car markets in Europe, Tesla made 30 percent of all vehicle deliveries in December alone. In Norway, for example, more than half of customer deliveries took place in December, it is said.

Tesla Motors (USD) 696.76

That is "strange", continues Dudenhöffer. The again weak January figures confirm the continuous downward trend for him: According to the study, Tesla only found buyers for 16 cars in the Netherlands. In comparison, Audi sold 57 e-trons. Tesla's market share thus shrank from almost 50 percent in 2020 to 12 percent in January 2021. Tesla is "practically no longer available" on the market, according to the study. The picture is similar for Germany: Tesla registered 453 new vehicles in January and the VW brand 4562 fully electric cars in the same period. "The January result seems sad," said Dudenhöffer.

Has Tesla over-revved?

Dudenhöffer assumes that the pressure on Tesla will continue to increase. The competition keeps coming up with new electric models. New competitors from Europe and lots of Chinese startups such as Nio, Leapmotor or Xpeng are now cavorting in the market. It is a difficult environment for Tesla, because "the dwarfs have enormous growth rates," says the study.

The bar for 2021 is therefore high. In order to utilize the existing production capacities, the electric car pioneer has to double its sales worldwide. In 2020, Tesla tried to counteract this with cost reductions in the battery sector and price cuts. In China alone, the price of the Model 3 was lowered five times within a year, by 30 percent from 54,500 US dollars to 38,300 US dollars. In Germany, the prices for the Model 3 also tumbled in January, according to electrive.net. But that doesn't make the situation any better. On the contrary, Dudenhöffer calculates: "If you factor in the profit from CO2 certificates, Tesla made a 'thin' profit of around US $ 1,000 per vehicle in the fourth quarter."

In comparison, Mercedes as a traditional carmaker earned 5,000 euros per vehicle before taxes – despite transformation costs due to the e-mobility turnaround. According to the Dudenhöffer study, it was $ 1,770 for Toyota and just under $ 2,800 per vehicle for Toyota.

According to the study, the world market for fully electric vehicles must double in 2021 for Tesla to still be able to achieve its production target of one million. At the same time, Tesla would have to keep its market share stable. Dudenhöffer thinks this is unrealistic: "The dividends and profits necessary for the stock market value cannot be seen. This also applies to the next few years."

. (tagsToTranslate) Economy (t) Tesla Motors (t) Elon Musk (t) Ferdinand Dudenhöffer (t) Auto Industry (t) Electromobility (t) Electric cars (t) Corporate strategies