Demand for Tesla Up or Down?
That is what the data says...
Survey data shows mixed demand for Tesla, with a surge post-covid but recent weakness.
Tesla's search trends have declined in 2022 but remain higher than pre-pandemic levels.
"Are you looking into the EV space?"
This was asked by an avid reader of our newsletters and a good friend (hi Will). This question comes in the wake of several newsletters that we have published highlighting the growing demand for electric vehicles. Our data-driven analysis continues to indicate that EVs are poised to become a significant part of the future of the automotive industry. It's no longer a story about what's to come; EVs are now a present reality. When it comes to investment decisions, our goal is to cut through the noise and use data to identify companies that have the potential to become significant players in the electric vehicle ecosystem and drive shareholder value.
The recent price cuts made by Tesla, which have occurred four to five times in the last three to six months, have raised concerns about the company's demand. The reason for these price cuts is a topic of speculation among experts. Some suggest that it may be due to weak demand, while others believe that it could be a strategic move to boost sales volume by reducing prices. While both scenarios are possible, it is important to avoid speculation and rely on data-driven analysis to draw accurate conclusions.
Here's a monthly survey done to measure demand.
The data indicates a clear trend. According to the survey, respondents were asked about their intention to purchase or lease a Tesla, and following the post-covid period, we saw a surge in demand, particularly among those who stated their intention as "very strong". This increase in demand was also observed as inflation and gas prices rose from mid-2021 to early 2022. However, since then, the number of respondents indicating "weak" demand has reached levels not seen since 2019.
We went ahead and reviewed this versus Google Search Trends.
The findings suggest that search trends for Tesla have declined in 2022 compared to the previous year. However, there is some positive news, as search activity for Tesla is still significantly higher than the levels observed in 2019 and 2020.
Will price cuts spur demand and increase share? A powerful force if so, or is this a demand issue that is trying to be plugged (ha).
Disclaimer: This is not a recommendation to purchase or sell any securities mentioned.