A lot can be said about the multi-billionaire, visionary electric car manufacturer and very controversial Twitter boss Elon Musk. However, not that he has made a name for himself as a literary scholar in the past. And so it’s not entirely clear what he actually meant in October when he announced an “epic end of the year” to his investors. An epic ending? Huge, great, unbelievably great, isn’t it?
Or maybe even: an end in the sense of a medieval heroic epic? With himself as a hero? One does not know. Just this much: In the end, the year came to a dramatic end for Musk.
From 340 to 137 billion dollars – you have to do that first
It all started with the 51-year-old becoming the first person ever to lose $200 billion in a year. According to Bloomberg, his fortune was still around $340 billion in November 2021 – today there are still an estimated $137 billion left. One of the reasons for the decline: the crash of Tesla shares, which lost 65 percent of their value in the past year alone. Something like this can happen quickly if you sell your own shares in the electric car manufacturer worth almost 40 billion dollars within a year and throw them on the market in order to be able to buy the social network Twitter at the end.
Not that long ago, Tesla was worth more than $1 trillion. It is currently around 386 billion dollars – that is still more than the three German car manufacturers VW, BMW and Mercedes-Benz bring together. But not as much as a year ago.
“Missing is missing.”
And in addition to the money, there is also the matter of the cars. The world’s largest e-vehicle manufacturer set a delivery record in the fourth quarter and handed over 405,278 cars to customers. But since experts had expected a few more cars, namely around 430,000 deliveries, one analyst judged: “Missing is missing.”
And he’s right: 50 percent more cars every year, that’s actually Elon Musk’s goal, and he didn’t achieve it last year. In fact, only 40 percent more cars went to customers than in 2021, even though two new factories in Texas and Brandenburg were opened this year. In addition, Musk seems to have landed directly and without a stop in a kind of logistics hell from “production hell”, as he once described the start-up difficulties of his plants. Because Tesla delivered 34,000 fewer cars than were built.
Sure, Tesla is still posting growth figures that German automakers could only dream of in 2022. The full annual figures are not yet available, but by the end of September BMW, Mercedes and VW were selling even fewer vehicles worldwide than in the same period of 2021. The main reason for this was the lack of computer chips – a problem that Tesla has dealt with much better than anyone so far others. While you have to wait a year or more for many models from German manufacturers, Tesla electric cars were usually available within a few months.
Big discounts in China are not a good sign
But what’s next? At Mercedes, BMW and Co., the order books for e-vehicles are full, while Tesla could have trouble building and selling as many cars as the four factories can produce – after all, almost two million. There have long been indications that demand at Tesla is faltering. In China, the electric car manufacturer is already giving high discounts, and in Germany significantly more vehicles have recently gone to rental platforms, which also suggests that the cars are being sold on more favorable terms than with direct sales. In addition, another sales driver will soon disappear in Germany: According to estimates by the CAR Center Automotive Research, around 3,000 Teslas went abroad as used cars in the first nine months of 2022 alone, subsidized with the German e-car premium. However, since the holding period for new cars has now been increased from six to twelve months, Tesla is likely to sell significantly fewer cars this way.
A few thousand cars more or less, missed is missed. Analysts can sometimes be merciless. But even Elon Musk, the multi-billionaire and visionary from California, can only do something to a limited extent against supply chain problems, growing competition from China and his customers’ fears of recession. And also little against the interest rate hikes by the US Federal Reserve, even if he would probably like to do so. Tesla is “running better than ever,” he wrote on Twitter in mid-December. “We have no control over the Federal Reserve. That’s the real problem.”
Hype, hopes and the future
The real problem, of course, could also lie in Musk’s self-made cosmos. Analysts fear that the new chief twitterer has just gone haywire and is seriously neglecting his old core business with cars. People like Paul Krugmann, who won the Nobel Prize in Economics, already see the Tesla share on a par with the cryptocurrency Bitcoin. What the electric car manufacturer and crypto would have in common: Both were based on hype and hopes, on the really big future scenario. But what if one day customers’ enthusiasm for Tesla wanes? And also the enthusiasm for the great visionary Musk?
The man who set out many years ago to save the world with electric cars and fly to Mars, who recently bought Twitter for $44 billion and runs a very controversial regiment there, sometimes locking out uncomfortable journalists and sometimes voting on his own chief role (and then initially ignores the result), has been in the process of publicly smashing the cult status he created himself for some time. And so Krugmann writes: “Based on what we have seen of Musk’s behavior, I would not even let him feed my cat, let alone run a corporation.”
Again, that’s quite an epic statement at an epic end of the year.