Electric car makers are burning cash, and Tesla Inc (NASDAQ:TSLA) is a no exception. Tesla reported profitability in Q3 and Q4 of 2018. However, it has posted a loss of $2 billion in 2018. Elon Musk, Chief Executive Officer of Tesla, said the company would make profits in the latter part of this year during the Q2 earnings call. Tesla reported a loss of $408 million in Q2 2019, a decline from $702 million in Q1 2019. According to CEO, Tesla would be probably at breakeven in Q3 and post a profit in Q4.
Commands a share of 78% in the US
Tesla commands a market share of 78% in the all-electric-cars in the US through last month. It is ten times more than Chevrolet Bolt, the main competitor of Tesla. In the battery electric vehicles market, the volume of Model 3 Tesla vehicles has surged to 111,650 in 2019 from 78,132 in 2018. The company is buoyant with increased production and deliveries of Model 3. However, the volumes of Tesla models S and X have declined marginally during the same period.
According to Adam Jonas, an analyst at Morgan Stanley, investors are worried for several years that Tesla would face competition from all-electric-vehicles. They fear that competition would eventually eliminate the competitive position of Tesla and erase its market share. However, even after the launch of Model S seven years ago, the play in the market is relatively peripheral despite the launch of new models from VW, Porsche, and Jaguar. Ford and Toyota, the global players in the auto, have not sold all-electric-vehicles.
Other electric car makers face troubles
Electric vehicle manufacturers such as Harley-Davidson, Dyson, Nio, and Faraday Future are struggling and burning cash without any fruitful results. Nio has burned a lot of money and even raised funds of $200 million from Tencent, a Chinese gaming giant, and William Li, Chief Executive Officer of Nio, in September 2019. The company is unable to meet its delivery targets. Around 75% of its shares have lost their value in 2019.
Harley-Davidson has halted the production of electric motorcycles amid troubles in battery charging technology. The company hopes to revive the sales, but it is facing difficulties. Dyson has stopped its electric car project ($3.1 billion).