The news today at electric vehicle maker Tesla (TSLA) has not been good. Indeed, the National Transportation Safety Board opened a probe into a fire that resulted from a Tesla Semi truck crash on August 19. However, it didn’t stop there because Reuters later reported that legacy automaker BMW (DE:BMW) had surpassed Tesla to become the top EV seller in Europe – the first time any company has done so, according to market research firm JATO Dynamics. As a result, TSLA shares sank over 4% in Thursday afternoon’s trading.
BMW sold 14,869 EVs in July, which surpassed Tesla’s figures by about 300, and its success can be attributed to government policies and brand loyalty. However, the overall EV market is slowing down due to unclear subsidies that are acting as a barrier for those considering purchasing an electric car. As a result, Tesla is taking a double hit because it doesn’t have gas-powered vehicles to fall back on.
To illustrate the extent of the problem, BMW’s sales surged by 35% in July on a year-over-year basis. On the other hand, Tesla registrations fell by 16%. What’s interesting is that legacy automakers used to be criticized for being too slow in terms of entering the EV market. However, it now seems like their traditional gas-powered vehicles are actually driving growth.
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 10 Buys, 14 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 10% decline in its share price over the past year, the average TSLA price target of $211.46 per share implies 1.21% downside risk.
