What Tesla's troubles tell us about the EV industry
CBC
Tesla's disastrous earnings report this week has sparked a sell-off of the world's largest electric vehicle manufacturer and widespread skepticism about the state of the EV industry as a whole.
"This is a fork in the road, not just for Tesla, but for the entire industry," said Wedbush Securities analyst Dan Ives in an interview on Wednesday.
Tesla's stock sold off sharply this week after its earnings report showed the company was on track for its slowest quarter since 2022.
Elon Musk's company blamed the lower production and deliveries at least in part on what it called temporary logistical issues.
Those temporary factors include shipping disruptions in the Red Sea and an arson attack on its new German battery plant.
Analysts were expecting softer numbers, but Ives called it "an unmitigated disaster."
Tesla stock has fallen more than 33 per cent this year. Back in January of 2022 it was trading for more than $400 US. By the beginning of April its stock was worth a mere $167 US.
Tesla's bad news often acts as a sort of proxy for how people feel about the broader state of the EV market.
On that front, recent headlines have not been encouraging.
In the United States, car-rental giant Hertz is selling about 20,000 electric vehicles due to higher expenses related to collision and damage, and replacing them with cars using internal combustion engines.
In October, General Motors announced it would cut production of EVs, citing slowing demand.
In January, Ford slashed production of its electric pickup truck in half.
"It's true, the pace of EV growth has slowed, which has created some uncertainty. We will build to demand," GM's CEO Mary Barra said on an earnings call.
But at the same time, Barra said she was "encouraged" by industry forecasts that showed EV sales in the U.S. were set to rise at least 10 per cent this year.
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