Investor's Corner
Tesla Model S, X softer sales in Europe are NOT due to the Audi e-tron and Jaguar I-PACE
In a note to clients on Wednesday, Bernstein senior technology analyst Toni Sacconaghi concluded that increased competition from vehicles such as the Audi e-tron and the Jaguar I-PACE is responsible for the recent weakness in Tesla’s sales volume in Europe. The analyst further warned that the arrival of other premium electric vehicles like the Mercedes-Benz EQC and the Porsche Taycan could worsen Tesla’s problem.
Explaining further, the Bernstein analyst added that the total market for Europe’s premium electric cars has only grown modestly in 2018 and 2019, and over this time, Tesla’s sales volume has decreased. “Our analysis suggests that the deteriorating sales trajectory of the Model S and X may be primarily due to competition, particularly in Europe, from Jaguar and Audi. In other words, the market isn’t growing much, and Tesla is losing share,” Sacconaghi wrote.
According to TSLA investor @Incentives101, an economist with a background in macro research, Bernstein’s conclusions are inaccurate. In a message to Teslarati, the economist provided a deep dive into the likely causes of the Model S and X’s sales decline in Europe, as well as the reasons why vehicles such as the Jaguar I-PACE and the Audi e-tron are in no way responsible for the reduced market share of Tesla’s flagship sedan and SUV.
Model S and X sales decline
It should be noted that Europe is a region, which means that it is comprised of multiple countries, each with a population of consumers that usually have different preferences in vehicle purchases. Looking at past vehicle sales data, the economist noted that from January-June 2018, Tesla sold 13,426 Model S and X in Europe, while in the first six months of 2019, the figure was 8,037.
“In those months of 2018, Norway and the Netherlands accounted for 52% of sales, while in 2019 it was just 28%. This means that 87% of the drop in sales of Model S and X in Europe is explained by the Norwegian and Dutch market. Furthermore, the Netherlands had Model S and X sales for the first six months of 2018 of 2,833 units and 167 for 2019. This means that the Netherlands by itself explains 50% of the drop in sales for Tesla’s flagship vehicles,” the investor wrote.
The Netherlands and Norway
If one were to look at the sales of the Audi e-tron and the Jaguar I-PACE in the Netherlands for the first half of 2019, one would find that the two vehicles only sold 362 and 111 units, respectively. This means that in the Netherlands, which was behind 50% of the drop in Tesla’s European sales, the e-tron and I-PACE couldn’t have been responsible since their combined sales are only 16% of the Model S and X’s 2018 sales for the same period. With this in mind, some headwinds were met by the Model S and X in the Netherlands, particularly in the form of a change in BIK incentives at the end of 2018, as well as the arrival of the more affordable Model 3, which has reached sales of over 6,000 units in the country.
As explained by the economist, Norway is a key market for Tesla in the European region, and it is responsible for 37% of the drop in Model S and X sales. For the first six months of 2019, Model S and X sales were 2,079 units, while the Audi e-tron sold 2,273 units and the Jaguar I-PACE sold 2,101. Bernstein’s note claimed that the market for premium electric vehicles didn’t increase, and thus, Tesla’s share of the European market just fell. This, according to the investor, is not correct. “If you take the previous Netherlands sales out of the equation — because it becomes incomparable — you’ll see that the market actually increased in Europe,” he wrote.
The actual reasons
The economist noted that there are a couple of factors that likely played a notable part in the decline of the Model S and X’s sales in Norway. First off, Tesla discontinued the 75 kWh (Standard Range) Model S and X, a variant that accounted for more than 80% of the sales in the country. More importantly, Tesla has entered the Norwegian market with the Model 3, a smaller, more affordable vehicle that boasts the best technologies that the electric car maker has to offer. “Norwegians have proven preferences for smaller and cheaper vehicles. Historically, the share of luxury vehicles in Norway is relatively low. It is then by no surprise that the Model 3 is currently selling at levels not seen in any other market, holding 14% of market share for total vehicles,” the economist explained.
In Norway’s case, at least, Tesla appears to have made a notable trade-off. It entered the market with the Model 3, which allowed the company to command 14% of the country’s total vehicle market. This came at a price in the form of a 50% decline in Model S and X sales. Of course, the removal of the Model S and X’s 75 kWh variant, as well as buyer expectations of an impending refresh of the two flagship vehicles, likely played a notable part in Norway’s sales decline as well.
Debunking Bernstein’s thesis
With these factors in mind, it appears that Bernstein’s findings are, for lack of a better term, inaccurate. The economist summed up his thesis as follows. “Two countries explain the drop in sales for the Model S and X almost entirely, and it’s absolutely clear that competition wasn’t the factor. Regulation and consumer preferences are. It is also important to mention that 28% of sales of the Audi e-tron were in Germany as well, a country where the Model S and X have never been strong, even at their peak.
“Consumers in the aggregate always behave rationally. There hasn’t been one example in history where a product(s) that is inferior in every way dominates the market or segment in which they compete. The Audi e-tron, the Jaguar I-PACE, and the Mercedes-Benz EQC are not even in the Model S and X segment specs-wise. Rather, they are closer in specs to the Model 3 and Model Y, both of which undercut them in price. The only reason people mistakenly put them against the Model S and X is their cost,” the investor explained.
Investor's Corner
Tesla wins $508 price target from Stifel as Robotaxi rollout gains speed
The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Tesla received another round of bullish analyst updates this week, led by Stifel, raising its price target to $508 from $483 while reaffirming a “Buy” rating. The firm cited meaningful progress in Tesla’s robotaxi roadmap, ongoing Full Self-Driving enhancements, and the company’s long-term growth initiatives.
Robotaxi rollout, FSD updates, and new affordable cars
Stifel expects Tesla’s robotaxi fleet to expand into 8–10 major metropolitan areas by the end of 2025, including Austin, where early deployments without safety drivers are targeted before year-end. Additional markets under evaluation include Nevada, Florida, and Arizona, as noted in an Investing.com report. The firm also highlighted strong early performance for FSD Version 14, with upcoming releases adding new “reasoning capabilities” designed to improve complex decision-making using full 360-degree vision.
Tesla has also taken steps to offset the loss of U.S. EV tax credits by launching the Model Y Standard and Model 3 Standard at $39,990 and $36,990, Stifel noted. Both vehicles deliver more than 300 miles of range and are positioned to sustain demand despite shifting incentives. Stifel raised its EBITDA forecasts to $14.9 billion for 2025 and $19.5 billion for 2026, assigning partial valuation weightings to Tesla’s FSD, robotaxi, and Optimus initiatives.
TD Cowen also places an optimistic price target
TD Cowen reiterated its Buy rating with a $509 price target after a research tour of Giga Texas, citing production scale and operational execution as key strengths. The firm posted its optimistic price target following a recent Mobility Bus tour in Austin. The tour included a visit to Giga Texas, which offered fresh insights into the company’s operations and prospects.
Additional analyst movements include Truist Securities maintaining its Hold rating following shareholder approval of Elon Musk’s compensation plan, viewing the vote as reducing leadership uncertainty.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Tesla receives major institutional boost with Nomura’s rising stake
The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Tesla (NASDAQ:TSLA) has gained fresh institutional support, with Nomura Asset Management expanding its position in the automaker.
Nomura boosted its Tesla holdings by 4.2%, adding 47,674 shares and bringing its total position to more than 1.17 million shares valued at roughly $373.6 million. The move makes Tesla Nomura’s 10th-largest holding at about 1% of its entire portfolio.
Institutional investors and TSLA
Nomura’s filing was released alongside several other fund updates. Brighton Jones LLC boosted its holdings by 11.8%, as noted in a MarketBeat report, and Revolve Wealth Partners lifted its TSLA position by 21.2%. Bison Wealth increased its Tesla stake by 52.2%, AMG National Trust Bank increased its position in shares of Tesla by 11.8%, and FAS Wealth Partners increased its TSLA holdings by 22.1%. About 66% of all outstanding Tesla shares are now owned by institutional investors.
The buying comes shortly after Tesla reported better-than-expected quarterly earnings, posting $0.50 per share compared with the $0.48 consensus. Revenue reached $28.10 billion, topping Wall Street’s $24.98 billion estimate. Despite the earnings beat, Tesla continues to trade at a steep premium relative to peers, with a market cap hovering around $1.34 trillion and a price-to-earnings ratio near 270.
Recent insider sales
Some Tesla insiders have sold stock as of late. CFO Vaibhav Taneja sold 2,606 shares in early September for just over $918,000, reducing his personal stake by about 21%. Director James R. Murdoch executed a far larger sale, offloading 120,000 shares for roughly $42 million and trimming his holdings by nearly 15%. Over the past three months, Tesla insiders have collectively sold 202,606 shares valued at approximately $75.6 million, as per SEC disclosures.
Tesla is currently entering its next phase of growth, and if it is successful, it could very well become the world’s most valuable company as a result. The company has several high-profile projects expected to be rolled out in the coming years, including Optimus, the humanoid robot, and the Cybercab, an autonomous two-seater with the potential to change the face of roads across the globe.
@teslarati Tesla Full Self-Driving yields for pedestrians while human drivers do not…the future is here! #tesla #teslafsd #fullselfdriving ♬ 2 Little 2 Late – Levi & Mario
Investor's Corner
Ron Baron states Tesla and SpaceX are lifetime investments
Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Billionaire investor Ron Baron says he isn’t touching a single share of his personal Tesla holdings despite the recent selloff in the tech sector. Baron, one of Tesla’s longest-standing bulls, reiterated that his personal stake in the company remains fully intact even as volatility pressures the broader market.
Baron doubles down on Tesla
Speaking on CNBC’s Squawk Box, Baron stated that he is largely unfazed by the market downturn, describing his approach during the selloff as simply “looking” for opportunities. He emphasized that Tesla remains the centerpiece of his long-term strategy, recalling that although Baron Funds once sold 30% of its Tesla position due to client pressure, he personally refused to trim any of his personal holdings.
“We sold 30% for clients. I did not sell personally a single share,” he said. Baron’s exposure highlighted this stance, stating that roughly 40% of his personal net worth is invested in Tesla alone. The legendary investor stated that he has already made about $8 billion from Tesla from an investment of $400 million when he started, and believes that figure could rise fivefold over the next decade as the company scales its technology, manufacturing, and autonomy roadmap.
A lifelong investment
Baron’s commitment extends beyond Tesla. He stated that he also holds about 25% of his personal wealth in SpaceX and another 35% in Baron mutual funds, creating a highly concentrated portfolio built around Elon Musk–led companies. During the interview, Baron revisited a decades-old promise he made to his fund’s board when he sought approval to invest in publicly traded companies.
“I told the board, ‘If you let me invest a certain amount of money, then I will promise that I won’t sell any of my stock. I will be the last person out of the stock,’” he said. “I will not sell a single share of my shares until my clients sold 100% of their shares. … And I don’t expect to sell in my lifetime Tesla or SpaceX.”
Watch Ron Baron’s CNBC interview below.
@teslarati :rotating_light: This is why you need to use off-peak rates at Tesla Superchargers! #tesla #evcharging #fyp ♬ Blue Moon – Muspace Lofi
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