During yesterday’s session at the NASDAQ exchange, Tesla Inc. recorded an impressive increase in stock value of 5.62%. The decision to nominate Elon Musk, Tesla’s CEO, for the position of head of the newly created agency for federal effectiveness was perceived by investors as a positive signal for the future of the company. Tesla, a global leader in the electric vehicle (EV) industry, is currently in a crucial moment of development. The company takes advantage of the dynamically growing demand for EVs and the implementation of advanced autonomous technologies, but must simultaneously face challenges related to regulatory policy and increasing global competition in the automotive market.
Republicans in the US are considering withdrawing federal tax incentives for electric vehicles, which could adversely affect the entire EV sector. Tesla, due to its high margins and global dominance, seems less dependent on such incentives compared to competitors such as General Motors or Ford. Nonetheless, the withdrawal of this support could limit the overall demand for electric vehicles in the USA, resulting in a decline in the company’s revenue.
Currently, EVs and plug-in hybrids only account for 10% of car sales in the USA, which demonstrates the dominance of gas vehicles. Tax incentives such as a $7500 credit play a crucial role in accelerating the transformation of the automotive market. Their removal could lead to a decrease in sales, limit investment in charging infrastructure, and slow down the electrification of transport in the USA.
Proposals from the new administration regarding federal regulations for autonomous vehicles present a significant opportunity for Tesla. President-elect Donald Trump promises to introduce legal frameworks that facilitate the development and licensing of autonomous cars nationwide. Such actions could significantly support Tesla’s strategy. By 2025, the company plans to launch a robotaxi service based on the advanced Full Self Driving (FSD) software.
Tesla has been investing in autonomous technologies for years, standing out amongst rivals. Even though its FSD system is one of the most advanced on the market, it still requires human supervision. Regulatory changes could accelerate the commercialization of this technology, strengthening Tesla’s position as a leader in innovation.
In the global EV market, Tesla needs to face growing competition, especially from Chinese manufacturers like Xpeng or BYD. These companies offer vehicles at more affordable prices while investing in advanced technologies, which allows them to gain progressively larger market shares. In the USA, Tesla maintains its advantage due to low production costs and efficient logistics. However, the intensification of competition requires constant implementation of innovations and the retention of a technological advantage. Tariffs on Chinese products, including electric vehicles, could benefit Tesla in the USA, but potential retaliatory tariffs from China could harm the company in its biggest foreign market.
The future of Tesla depends on two key factors: further development of autonomous technologies and global adoption of electric vehicles. While the company may benefit from new regulations supporting autonomous technologies, the potential withdrawal of tax incentives in the USA will pose a challenge for the entire EV market. Tesla, with its global scale of operations and technological lead, has the potential to overcome these challenges. However, the firm must be prepared for growing competition from Chinese manufacturers, who are rapidly gaining market shares by offering competitive prices and innovative solutions. In the long run, maintaining high-quality products, a technological edge, and operational efficiency – the foundations of the brand’s success – will be crucial.
Krzysztof Kamiński, Oanda TMS Brokers
Source: https://ceo.com.pl/tesla-na-fali-wzrostu-co-nominacja-elona-muska-oznacza-dla-przyszlosci-pojazdow-autonomicznych-i-elektrycznych-61147
