EV major Tesla (NASDAQ: TSLA) and other Chinese EV giants including Li Auto (LI), XPeng (XPEV), and NIO (NIO) could have a better 2023 as data suggests that the share of EVs could be reaching 10% of global sales for the first time ever.
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EV majors have had a rough 2022 with all the stocks, except for Li Auto, sliding by more than 60%. LI declined by more than 25% in the past year.
A Wall Street Journal report cited data from LMC Automotive and EV-Volumes.com and noted that global sales of EVs totaled around 7.8 million units in 2022, soaring 68% year-over-year. This rise in EV sales was largely driven by higher sales in Europe and China.
The report cited data from LMC Automotive and stated that last year, EVs comprised 11% and 19% of total car sales in Europe and China, respectively.
This is good news for Tesla as it has slashed prices in the U.S. and Europe and recently also lowered prices in China for the second time. XPeng has also followed suit and has reduced prices in China for its vehicles.
However, top-rated Goldman Sachs analyst Mark Delaney was surprised by the magnitude of Tesla’s price cuts and slashed his FY23 earnings estimates for the stock.
The analyst commented, “Although the reduced prices for Tesla vehicles will likely result in lower earnings, we expect this to help drive stronger volumes all else equal. We see this as important for Tesla’s vertically integrated model, especially as its new factories likely offer attractive unit economics at scale”
While Delaney kept the Buy rating on the stock, he slashed his price target to $200 from $205 earlier. The analyst’s price target implies an upside potential of 55.6% at current levels.
