Investors want Musk to focus on Tesla as EV competition grows

investmentnews.com:

Right on cue, Tesla Inc. skeptics are pushing back after this year’s sizzling $500 billion rally.

Rival automakers pouncing on booming demand for electric vehicles pose the biggest challenge for Tesla over the next two years just as Elon Musk appears distracted by his high-profile ventures, from social media and space travel to artificial intelligence.

So say respondents to the latest Markets Live Pulse survey. Out of 630 global MLIV Pulse contributors, 54% flagged the heightened risk of industry competition while 26% picked the behavior and decisions of its mercurial chief as a key concern for Tesla shareholders.

“Musk is just such an unpredictable person, that I would count it among one of the top risks for Tesla,” Matthew Tuttle, chief executive officer of Tuttle Capital Management, said in an interview.

As Tesla’s profit margins shrink, some 67% of survey participants said the billionaire executive should focus more on the carmaker. Their warning comes in the wake of a seemingly improbable 128% rally for the shares this year, fueled by renewed investor appetite for the tech megacaps and Musk’s prediction that the era of fully autonomous vehicles is nigh. 

Even though Tesla currently enjoys sizable lead over other companies, be it an established carmaker or a startup, a big part of its remarkably high market valuation rests on the assumption that it will be able to maintain this dominance in a future where EVs are more commonplace. 

Yet Tesla rivals are picking up the pace. Just earlier this month, China’s BYD Co. set a sales record for the second quarter, and delivered 352,163 fully electric vehicles. It has gained ground on Tesla, which handed over 466,140 EVs to customers worldwide — also an all-time high.

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