The electric-car giant is beset by intensifying competition, while its AI strategy appears unconvincing. Matthew Partridge reports
Tesla has warned that sales growth will be hit by “flagging demand, intensifying competition and persistent high interest rates [dampening] the effect of a series of price cuts”, says Tabby Kinder in the Financial Times. CEO Elon Musk, however, insists that the company is simply “between two major growth waves”.
A “new lower-cost car in the second half of 2025” is set to transform Tesla’s fortunes. But there are concerns that stalling worldwide demand for electric vehicles means that the world’s most valuable carmaker “has entered a new era of lower sales growth and margins”. This latest fall is just part of a poor start to 2024 that has seen Tesla’s market value slide by $94bn in the first two weeks of January after doubling last year, says Johana Bhuiyan in The Guardian.
Some of the turbulence is a result of bad publicity. Owners of Teslas in the US have complained of being unable to charge their cars or having their batteries lose all power in extremely cold temperatures. A longer-term concern, however, is that as the result of competition, Tesla has been forced to cut the prices of the vehicles it sells in China, which has lowered margins.
Rivals are going electric
It’s not just the “flood of low-cost Chinese cars that are arriving in the rest of Asia and Europe” that should worry Tesla’s investors, says Matt Oliver in The Telegraph. In addition to the threat from brands such as BYD, traditional US and European auto giants going electric means that Tesla “is gradually losing its first-mover advantage”. It is even facing “stiff competition” when it comes to its traditional strengths of battery technology and semi-autono
