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Our conversation began with the latest report out of Europe. I told Lee that the region’s automotive association released monthly sales showing Tesla down 49 percent and BYD up an astonishing 210 percent. Unit for unit, BYD is pulling away. The trend is not isolated. China just delivered Tesla its third-worst month in three years, and U.S. market share has collapsed from 80 percent in 2019 to about 45 percent today.
The Sizzle vs. the Steak
Lee and I both agreed that Tesla’s valuation, still among the ten most valuable companies in the world—is being held aloft by Musk’s narrative around robotics, AI, and autonomous driving. But narratives eventually require evidence. Lee pointed out that even after last year’s dramatic selloff, Tesla has climbed back above 400, despite persistently weak operational numbers. The gap between the storyline and the fundamentals is widening.
A Product Problem Hiding in Plain Sight
Lee stressed that Tesla cannot sustain share losses without addressing its lineup. The Cybertruck appeals to a narrow audience. The absence of an affordable 25,000 dollar sedan or a 35,000 dollar family SUV leaves Tesla exposed to every competitor with mass-market pricing. Meanwhile, in places like Tupelo, Mississippi, he sees one Cybertruck, singular, because very few households view it as a practical vehicle.
I agreed. Tesla once enjoyed uncontested premium branding, but EV buyers today are price-sensitive, and competitors are not only cheaper, they are improving rapidly.
Autonomous Driving Will Not Be a Monopoly
I told Lee that Musk’s long-promised self-driving dominance is now facing pressure from all sides. Alphabet’s Waymo continues expanding in major U.S. cities, and reports indicate Chinese companies already operate autonomous fleets with performance exceeding Tesla’s current system. True autonomy means I should be able to sit in the backseat with a beer and let the car legally take me anywhere. No one is close to that yet, but Tesla is not meaningfully closer than its competitors.
Lee noted that if Tesla were destined to own autonomy outright, it would already be visibly ahead. Instead, Waymo is live in San Francisco, Austin, and Las Vegas, and expanding into Europe. China is accelerating as well. Investor patience for perpetual delays may be approaching its limit.
Running Out of Runway
We ended by agreeing that Musk cannot sell the distant-future story forever. Market share erosion is now deep and global. Pricing remains uncompetitive. New autonomous leaders are emerging. And the promises that once powered Tesla’s valuation keep getting pushed out.
Transcript:
[00:00:00] Doug McIntyre: Lee, this morning, the association in Europe that measures car sales came out with their right over numbers. 49% drop in Tesla, 210% rise in BYD. So in, unit sales, BYD is way ahead of Tesla. They’re down in China. They just had their third worst month and three years. Their US market share was 80% in EVs in 2019.
[00:00:30] Doug McIntyre: It’s now 45%. Uh oh. How long can Elon Musk sell the sizzle and not the steak? How long can he sell the We’re robotics. We are ai right now. There are enough people buying that. So this is the 10th most valuable market cap company in the world.
[00:00:49] Lee Jackson: it is been so astonishing because, I mean, the stock has got absolutely slobber knocker, you know, about a year ago and got it.
[00:00:57] Lee Jackson: It’s trading well over 400 now, but it was down into the 280s, 270s. Yeah. and still there’s been some less than robust data to hit the tape from them. I don’t, I don’t think he’s gonna be able to sustain Tesla as it is without some real dynamic changes in the pricing and in the product.
[00:01:21] Lee Jackson: And therefore, and, and maybe, you know, there’s a guy here in Tupelo that has the Tesla truck. I, I see the same guy, one of them, you know, and they need to make a truck that people could buy that doesn’t look like a tank, you know? And they need to make a $25,000 sedan. It’s affordable for families and maybe a $35,000 van or, or, or SUV, but at, at, at the way things are going, they can’t keep losing that kind of market share, Doug.
[00:01:59] Doug McIntyre: No. Also, I don’t know how long Musk can particularly sell the fact that they are gonna be the absolute global leader in self-drive. And what I would call truly self-driving cars is when I can sit in the back, watch the game and have a beer. And the car will drive me anywhere and I don’t have to worry about crashes.
[00:02:19] Doug McIntyre: And it’s, it’s legal. You’ve got Waymo moving into that business, right? The Chinese claim, and I have no reason to not to believe this, that they have self-driving cars that operate in China that are advanced, even compared to the Tesla product. Self-driving cars, true self-driving cars, that’s not gonna be a business that Tesla owns by itself.
[00:02:44] Lee Jackson: I, I don’t think so either. I mean, if if they were going to own it, they’d be in the process of doing it right now, you know, because the, the game is being played and they’re starting and yeah, like you said, in San Francisco and Austin, my hometown of Austin, Texas and, and other cities, and they’re starting Waymo starting in Europe, I think as well.
[00:03:05] Lee Jackson: Yeah. And in Vegas and every playing else. So, yeah. There’s gonna be a conundrum that, that smacks these guys. That’s he, he, he tends to promise, promise, promise, promise. And that those promises always get pushed out a little bit. And you know, I, I think there’s gonna be a point when, when investors tire of that.
[00:03:29] Doug McIntyre: Yeah. And I think it’s soon. I I You, you can’t sell it forever. No. You just, you, you can’t
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