Elon Musk brought electric vehicles into the mainstream Tesla. Now the EV company is struggling with the consequences of its own innovation, formerly Ford engine CEO Mark Fields told CNBC on Wednesday.
“One of the many things he’s done is get the industry to take EV seriously,” Fields said of Musk, Tesla CEO. “He has real competition now, and that’s why you’re seeing some of their share in some of the big markets under a lot of pressure.”
Tesla shares fell for the third year in a row on the backdrop of several challenging headlines for the automaker. One in particular is that the San Carlos, California-based company lost some of its leverage in the electric vehicle market in April.
Fields criticized Tesla’s reliance on sales of carbon credits to bolster its profits, suggesting it heralds further challenges.
“If you look at their year-to-date earnings and last year earnings, they made a lot more out of carbon offsetting than all of their corporate and net profits,” Fields said. “When these loans dry up, there will be a lot of pressure to make money and better margins on their vehicles.”
According to Dan Levy, an analyst at Credit Suisse, Tesla’s global market share was 11% in April, up from 29% in March. He noted stock losses in the Chinese, European and US markets.
Fields attributed the shift in EV market share to traditional auto giants such as: General Motors and Ford making strides in the space as new products are announced and go online.
He emphasized that Volkswagen is now the leader in electric vehicles in Europe and the Ford Mach E has a stake in the US. Ford, which Fields led between 2014 and 2017, made a big roar about the unveiling of its electric F-150 in May.
After soaring in 2020, Tesla shares are down more than 14% so far in 2021. Trading more like a technology stock, the stock closed 3% lower at $ 605.12 per share on Wednesday.
Traditional auto company stocks in the form of cyclical stocks have risen double-digit this year, outperforming the market through Wednesday.
Ford stock has made some of the biggest gains, rising nearly 69% that year to $ 14.91 at the close of trading on Wednesday.