Cox Automotive estimated that Tesla’s (TSLA) U.S. sales fell to levels not seen in four years. Sales worsened after the U.S. government ended federal tax credits worth $7,500.
Tesla adjusted its business strategy to help spur demand. In October, the firm offered consumers both a Tesla Y SUV and a Model 3 sedan, both of which had fewer features. It priced the vehicles at around $5,000 lower than the previous baseline models. Unfortunately, this did not help. Total sales fell by almost one quarter, from 51,513 units last year to 39,800 in November.
Weak demand suggests that other EV makers will struggle. Lucid Motors (LCID) shares hovered near a yearly low. Short sellers hold a 36.96% short float against LCID stock. Truck EV supplier Rivian Automotive (RIVN) might avoid a sales slump. The stock is up by nearly 60% from its 52-week low on hopes that the unique offering would appeal to customers.
Bears hold an 18.73% short float on RIVN stock.
Investors bullish on the auto manufacturing sector are buying Toyota Motor (TM), General Motors (GM), and Ford Motor (F). They are betting that vehicles powered by either gas or hybrid would appeal to customers over the long term, compared to EVs.
Your Takeaway
Tesla's stock barely reacted to the weak sales. The stock has strong, sustainable momentum. Shareholders believe that its self-driving software, robotics, and cyber cab businesses will offset lower EV sales.
