The hard questions on Tesla. Part I: Why is growth slowing? What to expect next?
Tesla deliveries grew just by 20% in 4Q23, and the company guided for growth in 2024 to be “notably lower” than in 2023. Why is Tesla slowing when it is only at 2% market share?Reality is that with its current product portfolio, Tesla plays only in a fraction of the total market, and our exclusive analysis shows it has reached already ∼15% of its direct addressable market in the US, Europe, & China, which makes it the #1 brand on that segment already!
In this context, a slowdown in growth is sensible. We expect Tesla to continue to gain share on this addressable market going forward, although at a slower rate.
The Model 2 will expand Tesla’s addressable market by 3-4x and will result in a significant re-acceleration of growth, starting from 2025. Our analysis shows that if the Model 2 follows a trajectory similar to 3 and Y, but on its own addressable market, the company should deliver 8-9m vehicles in 2030.
Tesla designs, develops, manufactures, sells and leases electric vehicles and energy generation and storage systems, and provides services related to its products. The company operates as two reportable segments: automotive, which includes the design, development, manufacturing, sales, and leasing of electric vehicles as well as sales of automotive regulatory credits; and energy generation and storage, which includes the design, manufacture, installation, sales, and leasing of solar energy generation and energy storage products, services related to such products, and sales of solar energy system incentives.
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