The latest reports on electric vehicle (EV) sales have caused concern among Tesla investors.
Tesla (TSLA -1.03%) is scheduled to release its quarterly vehicle delivery report tomorrow. Ahead of this announcement, some investors are choosing to sell their shares. Tesla’s stock experienced a drop of as much as 5% before recovering some of the losses, trading 2% lower as of 2 p.m. ET.
The negative sentiment among investors may have been exacerbated by news from several of Tesla’s Chinese competitors. Recent data revealed that these competitors reported record monthly EV deliveries in September. Additionally, domestic competitor General Motors (GM) announced a significant surge in its U.S. EV sales during the third quarter.
Investors seem to view the increasing competition as a negative signal for Tesla’s future sales. GM’s quarterly EV sales grew by 60%, increasing its share of the U.S. EV market to 9.5%. This market share growth has been consistent throughout 2024, coinciding with the launch of new EV models by GM.
In the crucial Chinese market, competition from manufacturers such as Nio, XPeng, and Li Auto resulted in the delivery of over 96,000 EVs in September. This figure represents a new monthly record for these companies and growth of 44% year over year.
Investors were aware that competition in the EV market would intensify in 2024, with various manufacturers expanding their EV lineups. GM, for instance, is launching electric versions of its popular Chevy Blazer, Equinox, and Silverado models.
Following a 20% increase in Tesla’s stock over the past month, some investors are opting to sell, possibly interpreting the recent data as unfavorable for Tesla. However, there is a possibility that the earlier slowdown in EV sales growth this year is reversing.
Investors will gain clarity when Tesla releases its third-quarter delivery results tomorrow. Analysts anticipate around 463,000 deliveries, marking a 6.5% increase year over year. If Tesla exceeds these expectations, it could indicate overall growth in the EV market, which would be positive for Tesla and its stock.
Howard Smith, the article’s author, holds positions in Nio, Tesla, and XPeng. The Motley Fool has positions in and recommends Tesla, as well as recommending General Motors and specific options on General Motors. The Motley Fool has a disclosure policy.
