Elon Musk Doesn't Have To Sell More Cars Than Other Automakers For Tesla To Win EV War, Says Analyst: 'What's Most Important...Is The Profit Share Battle'
Portfolio Pulse from Benzinga Neuro
Canaccord Genuity's George Gianarikas suggests Tesla Inc. (NASDAQ:TSLA) could maintain its lead in the EV market based on profit share rather than unit sales, similar to Apple's strategy in the smartphone industry. Despite potential competition from BYD (OTC:BYDDF) (OTC:BYDDY) in terms of sales volume, Tesla's focus on high-margin products like Full Self-Driving software and vertical integration could ensure higher profits. Tesla is expected to deliver 1.82 million vehicles in 2023, a 37% increase from the previous year, and is planning a major Model Y overhaul in China for mid-2024.
December 28, 2023 | 3:03 am
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POSITIVE IMPACT
Tesla's focus on profit share over unit sales, along with its strategy for high-margin products like FSD software, could strengthen its market position and profitability despite increasing competition.
The analyst's comparison to Apple's success despite not leading in unit sales suggests a positive outlook for Tesla's profitability and market position. The emphasis on profit share and high-margin products is likely to be viewed favorably by investors, potentially leading to a positive short-term impact on TSLA's stock price.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEUTRAL IMPACT
BYD may outperform Tesla in EV unit sales, but the focus on sales volume does not necessarily translate to market dominance.
While BYD is acknowledged as a strong competitor in terms of unit sales, the article suggests that market dominance is not solely based on sales volume. This could mean a neutral short-term impact on BYDDF's stock as the market digests the implications of profit share versus unit sales.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
BYDDY, like BYDDF, may increase its EV sales but Tesla's profit-focused strategy could mitigate the impact of this competition on market dominance.
BYDDY's position as a competitor in unit sales is noted, but the article emphasizes the importance of profit share in determining market leadership. This perspective could lead to a neutral short-term impact on BYDDY's stock as investors consider the broader market dynamics.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50