Based on nothing more than recent headlines, it would be easy to be bullish on beaten-down Tesla (NASDAQ: TSLA) shares. The stock at one point had fallen 30% from its December peak largely because it lost its global lead to battery-powered electric vehicle (BEV) rival BYD Company (OTC: BYDDY). Now it has reclaimed that lead.
There’s always more to the matter, though. Indeed, the deeper you dig, the less compelling Tesla stock gets.
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After several months of trailing BYD’s total production of battery-only electric vehicles (or BEVs), Tesla is back on top. The iconic company delivered 358,023 EVs during the first quarter of this year, versus BYD’s count of 310,389 battery-powered electric vehicles sold.
That seems like a much-needed win for existing Tesla shareholders. But it’s not the whole story.
One of the more important footnotes to add here is that Tesla’s figure fell short of analysts’ expectations for 365,645 vehicles in the quarter. And BYD’s 310,389 was battery-powered automobiles, so that number does not include the 378,604 of its increasingly popular hybrid vehicles it sold last quarter. Tesla doesn’t manufacture hybrid vehicles.
Perhaps worse, Tesla is still losing total market share here and abroad. And in Europe, it’s losing share to BYD.
Now, losing share of an ever-growing EV market isn’t necessarily disastrous. It does present a problem that most investors aren’t accustomed to, though: Tesla’s waning pricing power stemming from a bevy of new competition. The company’s adjusted EBITDA margins have steadily slipped from 2022’s peak of nearly 24% to less than 16% last year. Investors just aren’t quite sure how to value Tesla shares under this new paradigm.
TSLA EBITDA Margin (TTM) data by YCharts
Then there’s another thing. That’s the fact that rather than figuring…
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