Tesla highlights Morgan Stanley’s EV sector strengths by outselling OEM competitors

The Tesla Model 3 at a Supercharger. (Photo: Tesla)

Tesla (NASDAQ: TSLA) highlights a new Morgan Stanely note that reveals a slowly developing and recovering combustion engine sector, along with growing electric vehicle numbers compared to 2020. The note, headed by analyst Adam Jonas, reflects Tesla’s strengths in a sector that is still growing but becoming more concentrated and competitive nearly every quarter as OEMs fight to dethrone the undisputed champion of the EV sector.

Examining figures out of the traditional dealership model indicates that consumers may be dealing with automotive inflation, which could contribute to low-end sales and inventory figures despite strong demand. Jonas writes that selling days were up one day to 27 total days this year in July, compared to 26 days in 2020. However, inventory is “hovering at record low levels,” with three fewer days of supply than last year. Some OEMs are struggling with even larger deficits, however. Ford is estimated to have 36 days of inventory, down 50% compared to last year’s 72 days of inventory. Stallantis is down to 35 days from 60 days last year.

The root cause of the drop could be attributed to several factors, including the ongoing semiconductor shortage that continues to stump automakers. Basic features like “push-to-start” in ICE cars are being eliminated to conserve semiconductor chips. Additionally, a transition in the preferred powertrain of consumers may also be happening, based on Tesla’s increasing sales data points, which include nominal sales, total market share, EV sector penetration, and basic sales figures.

Jonas said in the note that total industry sales on a selling day for ICE vehicles were +0.8% year-over-year, while BEV sales were up +98.5% year-over-year.

Tesla continues to be the EV maker with the most impressive sales statistics. In July, Tesla’s estimated 26,200 U.S. sales outshine the 14,379 total BEV sales from OEMs during the month. Outselling the world’s largest automakers by around 1.8x, it is no surprise Tesla continues to help grow the sector altogether, achieving the well-known company goal of “accelerating the world’s transition to sustainable energy.”

July 2021’s BEV penetration was 3.1%, nearly double that of the same month last year at 1.6%. With more competitors and models from other manufacturers in the United States, especially with the Chevy Bolt EV and Ford Mustang Mach-E, Tesla’s market share has decreased from 80% last year to just 65% in 2021, still making up the majority of U.S. EV sales. The increased competition is not unwelcomed, especially as the concentration of the EV sector is continuing to grow at a rate that should have ICE manufacturers slightly concerned.

After reporting the best quarter in company history in production and deliveries in Q2, Tesla extended its streak of profitable quarters to eight straight after beating Wall Street consensus estimates. With the emerging EV sector in the United States, Tesla is at the forefront and outsells competing automakers at a generous rate. The company’s robust July sales figures point toward more domination from Elon Musk’s company, while OEM figures show promise moving forward.

Disclosure: Joey Klender is a TSLA Shareholder.

Don’t hesitate to contact us with tips! Email us at tips@teslarati.com, or you can email me directly at joey@teslarati.com.

Joey Klender: Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his time at TESLARATI, Joey has broken several big stories, including the first images of the Tesla Model S Plaid, the imminent release of the 4680 Model Y through EPA certification, and several expansions to the Lucid AMP-1 factory in Arizona, to name a few. His stories have been featured in several publications, including Yahoo! Finance, Fox News, CNET, and Seeking Alpha. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on Twitter @KlenderJoey.
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