©Reuters. EV slowdown shows no evidence of inflection – analyst
Analysts at RBC Capital Markets said one of the key findings of the current earnings season is that the electric vehicle (EV) market “shows no evidence of inflection.”
Tesla’s (NASDAQ:) delivery outlook for 2024 suggests significantly lower growth than 2023, attributing the cautious forecast to uncertain economic conditions such as affordability and interest rates.
This has led to a consensus expectation of a 14% increase in deliveries for 2024, a sharp decline from the 40% growth seen in 2023, amid concerns that price reductions may be needed to meet these expected volumes.
Meanwhile, Ford (NYSE:) reported worsening EV losses for the fourth quarter of 2023, with the loss rising to $1.57 billion from $1.329 billion in the previous quarter, and expects losses to continue higher for 2024, exceeding consensus estimates.
In summary, legacy OEMs “may be better positioned than Pure Play EV names,” the analysts write.
“Specifically, names less exposed to EV fixed cost bases (Stellantis (NYSE:)) or demand issues (Ferrari (NYSE:)),” they added.
Meanwhile, the pursuit of Level 4 autonomous driving continues to face obstacles, indicating that significant barriers to full automation remain.
“For now the focus will likely be on Level 2+ efforts. OEMs may shift to outsourcing to suppliers rather than pursuing internal autonomy. Mobileye SuperVision and Tesla FSD are consistent with this narrative,” the analysts said.
“We don’t expect a major Tesla FSD licensing announcement in the immediate future, but if a rate hike were to apply to existing Teslas, it could be a major catalyst for stocks. This could result from price cuts at FSD,” they added.
Finally, concerns about overstocking among suppliers appear to be largely unfounded, suggesting that fears of overstocking may be overblown and are quite specific to Mobileye.