Twitter coughs, millions of Internet users at his bedside. But during this time, it is Tesla who catches a cold. The electric car maker’s share price took a spectacular tumble last year: from prancing to $400 in January 2022, it fell below $200 in November and continued its plunge (it trades at $123 currently). Of course, the tech sector as a whole has been going through a period of turbulence since the rise in interest rates. And Tesla isn’t the only company to have seen its stock plummet in the past 12 months. But in the galaxy of car manufacturers, Elon Musk’s company has been particularly attacked. And the game promises to be tight, for her, in 2023. Now that Tesla has paved the way for the electric car with the force of the wrist, the other manufacturers are rushing in massively.
Tesla must now face competition from high-end vehicles from Volvo and Lucid Motor, but also from low-cost cars from the Chinese BYD or Wuling. In the intermediate range, it’s worse: almost all car manufacturers are now rivals for Elon Musk’s company. But “they have much more diversified ranges than Tesla”, warns Jean-Pierre Corniou, deputy general manager of SIA Partners. Tesla’s catalog only has four cars (Model Y, Model 3, Model S and Model X) to which the first Semi trucks have finally been added, with some delay. It’s starting to suck.
A point that is all the more boring as with constrained purchasing power, consumers are likely to be less inclined to fall for electric vehicles, often 10 to 15% more expensive than thermal cars in the months to come. Of course, Tesla’s fundamentals remain strong (its profitability is now the highest in the global auto industry). But Elon Musk must react quickly if he wants to keep his locomotive on track. Rather than disperse on humanoid robot projects of nebulous interest, he must accelerate the marketing of his Cybertruck. The presentation of this electric pickup caused a sensation in 2019. But since then its launch (scheduled for 2021) has been constantly delayed, while the competition (Ford, Rivian) already has models of this type. on the roads. Elon Musk must also “stop selling shares”, intimates analyst Dan Ives of Wedbush Securities in a note formulating ten recommendations to the billionaire before suggesting “a large plan to buy back shares […] strategy to restore market confidence.”
Finally, the Twitter takeover circus has lasted too long. Beyond brutal managerial methods, the first weeks of Elon Musk showed that the billionaire did not have the science infused. His starting bet is not stupid because the blue bird has a lot of potential: he has a confidential audience if we compare it to a Facebook or a TikTok, but he has a great influence on opinion leaders. And the old management had not boldly explored the network’s monetization levers. Elon Musk’s controversial announcements and ill-prepared launches have however shown that, despite his good intuitions, he did not master the subtle mysteries of these platforms (the first version of his subscription supposed to reduce the number of fake accounts on Twitter even made the problem worse). A mess that has confused users and scared away leading advertisers, while advertising is the network’s only real source of revenue.
The acquisition of Twitter has also taken a very political turn in recent weeks. Elon Musk, for example, published on his platform messages calling on to vote Republicans during the midtermsto bring Anthony Fauci, Washington’s ex-Covid adviser to justice and suspended accounts of journalists from CNN, the New York Times and washington post (before restoring them facing the rumble). Divisive actions that cool a fringe of potential customers.
“The more Elon Musk becomes politicized on Twitter, the more difficult it will be for him to sell electric cars to a large audience”, underlines Dan Ives in his summary. It is therefore urgent that the entrepreneur let go of the reins of the network and appoint a new CEO at the head of Twitter, as he promised to do to refocus on Tesla. Especially since several large shareholders of the American manufacturer are beginning to be tired of his strokes of madness. “Between 2010 and 2020, it was the decade of credibility, explains Jean-Pierre Corniou. We had to show the potential of the electricity market. Today, a new decade is opening, that of industrial rationalization. ” And in this new game, the incumbent manufacturers have experience in high-volume production that a Tesla does not have.
Elon Musk’s visionary strategy and his showmanship are undeniably the ingredients that brought the company to the firmament at a time when the bet of the electric car was far from obvious. It remains to be seen whether his talents will also be adapted to the unprecedented challenges of this new era which is opening up for the electric car sector. Admittedly, Elon Musk is to Tesla what Steve Jobs was to Apple. But let’s not forget that it was the discreet Tim Cook who made the latter the most profitable company in the world. “Today, Tesla must learn to become a normal company, summarizes Jean-Pierre Corniou. This is no longer the time for whims.”
