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By now, the sector-wide retrenchment in the demand for electric vehicles has become an established fact, forcing EV players throughout the globe - barring their state-subsidized Chinese counterparts - to rollback on growth ambitions. This retrenchment, however, is now moving in Tesla's favor as the EV giant continues to exploit its first-mover advantage.
Recently, Toyota slashed its 2026 EV production target by ~30 percent to just around 1 million vehicles. In the EU, Volkswagen is considering the closure of "one large vehicle plant and one component factory in Germany," as per the reporting by Reuters. Volvo has also binned its plans to fully transition to EVs by 2030. Similarly, in the US, Ford has halted the development of electric SUVs amid tepid demand and GM has delayed the production of these large EVs by at least 2 years.
MORGAN STANLEY: “.. Tesla continues to surrender EV share coming to 14%
globally, vs. 20% share in June and 17% share on a YTD basis.” [Jonas] $TSLA pic.twitter.com/FS3IT1byDR— Carl Quintanilla (@carlquintanilla) September 4, 2024
Even Tesla remains vulnerable to increased competition emerging from China in a globally saturated market. Consider the fact that the EV giant continues to cede its market share to Chinese OEMs, especially BYD. As of July 2024, Tesla commanded a 14 percent global market share vs. 17 percent for BYD.
Yet, holding true to the idiom that suggests every cloud has a silver lining, Tesla perversely stands to benefit as most of its peers in the developed world enter a hibernation mode of sorts to ride out the ongoing market-wide malaise.
I correctly predicted almost a year ago this would happen: credit sales „likely continue to grow …while analysts are all too quick to dismiss them“ https://t.co/CnNuMOYOgR pic.twitter.com/VUdTtAWiGx
— AJ (@alojoh) September 9, 2024
Tesla recorded an all-time high revenue of $890 million from the sale of its regulatory credits in Q2 2024. What's more, the EV giant had explicitly noted at the time that its credits revenue "depends on the other OEMs' plans." Well, one Tesla-focused analyst, who has been fairly accurate on his calls in the past, now thinks that the EV giant can boost its credit sales to a new all-time high in Q3, courtesy of the major EV players scaling back their respective production plans.
Meanwhile, investors are largely positive on Tesla after it revealed its FSD release roadmap for the next few months last week, announcing among other things the arrival of the FSD version 13 in October and the concurrent unlocking of the ability to reverse in FSD, and a Q1 2025 rollout of FSD in the EU and China. This comes as the EV giant prepares to hold a much-anticipated robotaxi reveal event in October.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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