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Quantfury Daily Gazette

True contrarian argument

by
Lev Mazur
Quantfury Founder

Tesla (NASDAQ: TSLA) is quite a “popular” stock and is subject to endless discussion and speculation. It seems it has all the angles to attract any type of market participant. Investor, trader, speculator – you name it. The company touches every layer of today’s market news. Crypto? Sure! Innovation? Of course! Charismatic management? Plenty! Scandals… never shy of it!

However, the core product of Tesla today is facing competition like never before. Tesla’s electric cars today compete with at least 4 well-establish automotive companies – Ford (NYSE: F), Daimler (ETR: DAI), Volkswagen (ETR: VOW3), and Audi as well as with 3 newcomers: pure electric car manufactures that make headlines with the releases of their new cars. These electric cars that Tesla competes with not only have similar performance but also cover broader market segments such as Ford and Rivian’s electric trucks, or Nio (NYSE: NIO) and Volkswagen’s entry-level electric cars that are significantly cheaper than Tesla’s entry-level car, the Model 3.

So the traditional argument is that Tesla is about to lose market share and face competition, thus adding costs to the company’s bottom line. However, it could be that the overall market shift to mass adoption of electric cars will increase the awareness and willingness of consumers to go green and electric, thus further expanding Tesla’s market share and resulting in the company doing… way better. It could be a true contrarian argument, as far as I know.

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