Tesla stock has dropped as much as 70% over the past year, shedding more than $700 billion in market cap.
For context, the national economies of Saudi Arabia, Switzerland, Argentina, Sweden, and Poland all have less than $700 billion in annual GDP. Therefore, Tesla stock has basically lost as much economic value over the past year as entire countries produced.
But as the old saying goes, one man’s trash is another man’s treasure. That saying is especially true as it relates to Tesla stock.
Tesla Stock: Trash to Treasure
Sure, you can blame a lot of factors for the massive wipeout that has happened at Tesla. Elon’s antics. Supply chain issues. Production woes. Pricing problems. So on and so forth.
Those factors make good headlines. But that’s all they are – headlines. They didn’t cause Tesla stock to crash in 2022. Rather, the culprit of this plummet was competition – and market share erosion.
Just look at the following chart. It graphs Tesla’s market share of the global EV market over the past five years.
As you can see, Tesla steadily gained throughout 2018 and 2019, with its share of the global EV market growing from less than 10% to nearly 20%. That was primarily due to the successful ramp of the Model 3, which was the world’s first affordable and cool electric vehicle.
But around mid-2020, its market share peaked. Over the past two years, instead of rising, Tesla’s market share has been consistently falling. Today, Tesla’s global EV market share sits at just 13%.
In other words, the seeds of Tesla’s demise were sewn back in 2020 and ‘21, when the company failed to build on the success of the Model 3 and proceeded to lose considerable share of the EV market. That’s why we told our subscribers to sell TSLA stock earlier this year and book huge profits.
But our advice hasn’t been to just sell TSLA stock – it is now shifting toward buying EV stocks.
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If Tesla is losing share in the global EV market, then that means other companies are gaining it. And the global EV market is growing very quickly. Over the last 12 months, nearly 10 million EVs have been sold. That’s up about 70% year-over-year. And since Tesla’s market share peaked in mid-2020, global EV sales have risen by over 350%!
Put differently, some EV makers not named Tesla are rapidly gaining share in an industry that has grown 350% over the past two years.
And those EV makers are profiting big from Tesla’s demise.
The Final Word
That’s why, in our flagship research service Innovation Investor, we’re pounding the table on an EV stock not named Tesla.
There’s one that we think has far more upside potential than any other in the space right now…
Rather, it’s a tiny EV supplier building world-changing technology that we expect will become standard on EVs in the near future.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.