Tesla Model Y (VCG / Getty Images)

Tesla’s market share is down, but its valuation is still sky-high

Tesla’s competitors are elbowing in, but it’s still easily worth more than Ford and GM combined

7/11/24 2:08PM

The New York Times reported yesterday that Tesla’s share of the US electric car market fell below 50%:

Tesla accounted for 49.7% of electric vehicles sales from April through June, down from 59.3% a year earlier as the company led by Elon Musk lost ground to General Motors, Ford Motor, Hyundai and Kia, the research firm, Cox Automotive said. It was the first time the company’s market share fell below 50% in a quarter, according to Cox.

I’d like to share a few stats on Tesla, Ford, and General Motors:

Tesla sells fewer cars than General Motors and Ford. Tesla is also worth ~$500 billion more than General Motors and Ford, combined. Why is that? The market has, for a while, valued Tesla as some combination of a technology company and a growth company due to its position as the market leader in electric vehicles and its high revenue growth.

In April, when the “growth” argument weakened after Tesla posted an 8.5% annual decline in deliveries, I pointed out that because Tesla’s margins were in line with those of traditional auto manufacturers, as opposed to tech companies, and Tesla’s deliveries were flatlining, shouldn’t Tesla’s valuation fall more in-line with auto manufacturers?

And now, Tesla has slipped below 50% market share in the US, its biggest market. I guess, if you wanted, you could have previously made the argument that EVs are inherently more valuable than regular cars because “EVs are the future” (even though their gross margins are similar), and give Tesla a premium valuation as it dominated the EV market. But Tesla now only represents half of the EV market. As EV adoption continues to grow, and competitors increase their EV sales, Tesla’s market share will likely continue to decline (even if its total deliveries increase). My question is this: at what point will the value of Tesla’s EVs converge with the value of other car companies’ EVs? Because right now, either 1) Tesla’s cars are overvalued or 2) competitors’ EVs are undervalued.

Of course, maybe I’m overthinking this, and Tesla will always be worth more than its competitors, combined, regardless of sales, because it’s Tesla, and Tesla has Elon Musk, and you can’t assign a dollar value to their CEO and his… engaged following.

Nate Becker9h

DraftKings drops after issuing downbeat 2026 sales, profit forecasts

DraftKings plunged after the sports betting company gave downbeat guidance for the current year.

Shares were down 15% in recent after-hours trading.

It forecast:

Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet.
Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted:

Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation
Earnings per share of $0.25, compared with a consensus estimate of $0.09.

DraftKings Reports Fourth Quarter Revenue Growth of 43% | DraftKings Inc.

It forecast:

Revenue between $6.5 billion and $6.9 billion, compared with analysts’ estimates of $7.29 billion, according to FactSet.
Adjusted EBITDA of $700 million to $900 million, compared with estimates of $981 million.

For the fourth quarter, DraftKings posted:

Revenue of $1.99 billion, in line with Wall Street’s $1.99 billion expectation
Earnings per share of $0.25, compared with a consensus estimate of $0.09.

Max Knoblauch9h

Rivian climbs after posting better-than-expected Q4 results; sees R2 SUV hitting the market in Q2

EV maker Rivian reported its fourth-quarter and full-year earnings results after markets closed on Thursday. Its shares climbed 13% in after-hours trading.

In the fourth quarter, which coincided with the end of federal EV tax credits in the US, Rivian booked $1.29 billion in revenue, down 26% year over year but above analysts’ expectations of $1.26 billion. The company posted an adjusted loss of $0.54 per share in Q4, compared to the expected loss of $0.68 per share.

Rivian forecast full-year adjusted losses in the range of $1.8 billion to $2.1 billion, compared to the $1.75 billion loss expected by Wall Street.

2026 is set to be a big year for the company, with its upcoming $45,000 R2 SUV planned to begin deliveries in the second quarter. Rivian issued full-year delivery guidance of between 62,000 and 67,000 vehicles, compared to Wall Street’s expectations of 65,700. Analysts polled by FactSet expect 14,700 of those 2026 deliveries to be R2s. Last year, Rivian delivered 42,247 vehicles.

“It’s incredibly exciting to see the early strong reviews of the R2 pre-production builds, and we can’t wait to get them to our customers next quarter,” CEO RJ Scaringe said.

Matt Phillips9h

Arista Networks soars as it beats on Q4 EPS and revenue, gives upbeat sales guidance

Arista Networks, which sells equipment and software used to run and monitor data center networks, reported better-than-expected fourth-quarter earnings and sales after the close of trading on Thursday.

Arista shares were up about 9% in the after-hours session.

Here’s what the switch and router maker reported:

Adjusted earnings per share of $0.82 vs. Wall Street expectations for $0.76, according to FactSet.
Sales of $2.49 billion vs. an expected $2.38 billion, per FactSet data.
A non-GAAP Q4 gross margin, a measure of how profitable a company’s core products are to produce, of 63.4% vs. previous guidance of 62% to 63%.
Guidance for Q1 sales of approximately $2.6 billion vs. the $2.46 billion expected on Wall Street.
Guidance for a Q1 non-GAAP gross margin of between 62% and 63% vs. the 63% FactSet forecast.

Matt Phillips9h

Coinbase posts record stablecoin revenue but falls short of expectations for Q4 sales

Shares of cryptocurrency exchange Coinbase jumped after-hours on Thursday after the company reported record stablecoin revenue, despite Q4 revenue numbers that missed Wall Street expectations.

The stock was up 3.1% in recent trading.

Revenue came in at $1.78 billion vs. the $1.81 billion consensus analyst expectation, per FactSet.
Transaction revenue was $982.7 million vs. a $998 million forecast.
The company reported adjusted earnings per share of $0.66, compared with $3.37 a year earlier.
Stablecoin revenue hit a record $364.1 million, up 61% from the same quarter the previous year.

Earlier Thursday, Coinbase seemingly suffered an outage, saying it was “aware that customers may be unable to buy, sell, transfer on Coinbase.com at this time,” but noting that “your funds are safe.” The company said the issue was resolved just over an hour later.

Coinbase shares — which were added to the S&P 500 last May — have been crushed by the downturn in crypto this year. Through Wednesday’s close, the stock was down by more than 30% in 2026. And that was before the stock caught a double downgrade on Thursday before the report.

Luke Kawa

10h

Applied Materials jumps after posting better-than-expected Q1 results, strong Q2 outlook

The semicap company just reported its Q1 results.

Applied Materials campus in Silicon Valley