Lately, many have insisted that the introduction of new EVs by legacy automakers is driving a loss in market share for Tesla. Supposedly this is evidence that insures Tesla’s demise as other automakers continue to introduce more electric vehicles. Nothing could be further from the truth. In fact the EV space is not a segment of win-lose. The EV market will become a segment for many winners as electric vehicle sales continues to expand.
As an investor in companies in the EV space, do not assume that legacy automakers can only win if Tesla loses, or vice versa.
The data below highlights the 20.3% growth of the EV segment during a 2020 pandemic year when overall vehicle sales in the U.S. fell 14.4%. Tesla, General Motors and the VW Group all grew their EV sales substantially in 2020 compared to 2019. In a market environment where a segment is growing substantially like EVs today, market share is almost meaningless. Volume and vehicle sales growth over time are the most important metrics.
I believe Tesla and GM (two of my taGMan companies) will be certain winners in an accelerating EV sales world. This is one reason I’ve owned shares of both companies for several years. But these companies will not be the only winners. There is room for several companies to thrive in the space. Do not be fooled into believing (like many) that Tesla will win while all others lose; or that legacy automakers will soon thrive, which is certain to kill Tesla.
Disclaimer
TaaSMaster, LLC is not a registered investment advisor or broker/dealer. All investment opinions expressed by TaaSMaster, LLC are from personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors may occur.