Daily Brief: Elon Needs To Keep His Eyes On The Road, As Tesla Starts To Veer Off Course

Daily Brief: Elon Needs To Keep His Eyes On The Road, As Tesla Starts To Veer Off Course

over 1 year ago3 mins

Mentioned in story

Tesla announced over the weekend that it delivered far fewer cars than analysts were expecting last quarter.

What does this mean?

You might’ve been so wrapped up in Elon and Twitter’s will they, won’t they that you forgot about Tesla, the billionaire’s other little venture. Let’s catch you up: a shortage of parts and the pandemic-linked shutdown of the company’s Shanghai plant – which produced around half its total output last year – limited the number of EVs it could deliver last quarter. And sure, it still shipped nearly 255,000 of them – 27% more than it did the same time last year. But that was well below estimates, which analysts had already revised down in light of China’s lockdowns. Tesla has now delivered 564,000 this year, but it’ll need to get cracking if it has any hope of meeting its full-year target of 1.5 million. Challenge accepted: June saw Tesla produce the most EVs it’s ever produced in a single month.

Tesla deliveries
Source: The Wall Street Journal

Why should I care?

The bigger picture: What goes up…

Bank of America is expecting annual EV sales in the US to hit 3.2 million by 2025, up from 400,000 last year. But it also thinks Tesla’s position as the US market leader is finally under threat. The bank suspects a barrage of new EV releases from other carmakers means Tesla’s market share will dwindle from 70% today to 11% by 2025, and that GM and Ford will lead the US market with 15% each.

Tesla stock

For you personally: Tesla isn’t just an EV maker.

Tesla might’ve lost $350 billion in market value this year, but it’s still outperformed both of the aforementioned rivals. That might be because its exposure to cutting-edge tech – like robotics and more efficient solar roof tiles – means investors are buying into more than just EVs. And since some analysts think its stock will be 50% higher in 12 months’ time, its recent dropoff might make now prime time to buy in yourself.

Keep reading for our next story...

Germany Posted Its First Trade Deficit In Over 30 Years

Germany image

Data out on Monday showed that Germany posted its first trade deficit since 1991 in May.

What does this mean?

Germany is renowned for its strong export economy, but a few factors are starting to chip away at that reputation. First, lockdowns in China caused demand from the East to crater. Second, Germany’s exports to Russia in May were less than half what they were at the same time last year, given all the war-related sanctions and disruptions. And third, the price growth of German imports – primarily energy and raw materials – completely overshadowed that of exports in May. That helped drive the total value of exports down 0.5% from the month before, even as imports climbed 2.7% – creating a deficit of around $1 billion.

Germany trade deficit

Why should I care?

The bigger picture: Another day, another recession prediction.

Economists are expecting this deficit to hang around, with demand staying muted amid the global economic slowdown. Actually, they’re worried it might get even worse, with Russia at risk of cutting natural gas supplies yet again. That could push entire industries like aluminum, glass, and chemical production into collapse, denting Germany’s economic output and putting millions of jobs at risk. Economists, then, are predicting that the German economy will shrink this quarter, and probably even enter a recession later this year.

Zooming out: Turkey doubles down.

If Germany has problems, there isn’t a word for what Turkey has: data out on Monday showed that the country’s inflation rate hit nearly 80% last month. Its government is sticking to its guns on low interest rates, refusing to accept the widely accepted truism that hiking rates limits inflation. And the country has just poured fuel on the flames: it raised its minimum wage again last week, giving consumers more disposable income they can use to push prices even higher.

Turkey inflation


All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG