A new car usually draws oohs and aahs. But not, this time, for Tesla. Its shares have fallen 14 per cent since the latest version of the Model S was launched last week. The market wants more than four-wheel drive and automatic safety features.
The bear case for Tesla is straightforward. Oil is near a four-year low, so hybrid and electric cars in the US – the largest market for these vehicles – have lost market share to the internal combustion engine this year. Sales of electric vehicles in the US are expected to fall 5 per cent in 2015, says LMC Automotive. On top of this, Tesla, a first-mover, is starting to face real competition.
Mercedes and BMW have offerings at the top end of the market, where Tesla operates. More affordable electric vehicles are also growing: the Nissan Leaf outsold Tesla in the US in the first nine months of this year.